Monday, February 16, 2009

Video Insider: Will Consumers Pay To Watch Ads?

Will Consumers Pay To Watch Ads?

WHEN THE MAJOR CONSUMER ISPS began to announce that use of their broadband services would be metered, the mainstream and trade press warned: "Bandwidth hogs, beware."   But it's really publishers and marketers who should be wary.

In Beaumont, Texas, where Time Warner Cable initially began to "trial" metered usage nearly a year ago, Multichannel News  reported that the caps would be tested between 5-40GB per month. Think that sounds like more than you'd ever use? Today one of the most popular downloads in the XBOX Live Marketplace is a movie called  "Eagle Eye" --  which, downloaded in HD, is 5GB.  You can see the problem.

As the ISPs expand metering to other markets, they insist that the metering of usage is to prevent those so-called "bandwidth hogs" from slowing down the works for everyone. Indeed, we've all experienced frustration at work when our email attachment takes forever to send because "that guy" is watching the latest viral video at his desk. And we're all well aware of the very real damage done to the entertainment industry caused by those who traffic in pirated content.

At home, I have an insanely good connection. In the nearly three years I've lived at the same address, Time Warner Cable's RoadRunner service hasn't so much as hiccupped once. Were I so inclined, I could pull down "Eagle Eye" from my XBOX and begin watching it in seconds. However, if I lived in a market with a usage cap as low as 40GB, after watching an average of two movies a week each month, the meter would start running and I'd be paying by the bit.

Much has been written about the perceived conflict of interest in metering. It costs me nothing beyond my monthly subscription to watch "Eagle Eye" on cable TV, but it could cost me as much as $1 per GB to watch it via a non-cable operator owned source, such as XBOX Live, PlayStation, Netflix or iTunes.

Largely missing from the conversation, however, is a discussion of the chilling effect that broadband caps could have on digital advertising. Marketers have come to count on the greatly enhanced consumer attention, recall and interaction that all forms of broadband video advertising offer. Publishers rely on the strong and growing revenue stream that video ads bring them.

We know that running a great :15 spot prior to user-selected content is an excellent way to communicate with an engaged, forward-leaning user. But what happens when, because his usage is being metered, the user is actually paying to see the marketer's ad?

All members of the interactive advertising value chain must act now to ensure that the growth of video advertising is not stymied by users rejecting the idea that they are effectively paying to be pitched. This is the time for ISPs to understand that giving consumers choices when it comes to where and how they consume video will ultimately strengthen their businesses. Operators have a right and responsibility to effectively manage their networks, but also to ensure a fair experience for all of their customers.

Lewis Rothkopf is vice president of network development at BrightRoll, charged with building strategic partnerships with the Web's top branded publishers. Prior to joining BrightRoll, Lewis was head of distribution for the National Broadband Company, NBC Universal's digital video syndication business.

Video Insider for Monday, February 16, 2009:

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