Free Video-on-Demand Services Expand, Seeking Advertisers to Fuel Growth

Television networks and technology companies are developing free video-on-demand services, which are expanding rapidly, seeking more viewers and asking advertisers to help support their growth. Comcast Cable's 8.5 million digital subscribers received a free on-demand parenting network called Alpha Mom TV, while Gemstar-TV Guide International has lined up the Kellogg Company's Cheez-It brand to sponsor its planned debut of TV Guide Spot. Music Choice has run trial campaigns for brands like Diet Sprite Zero, and Rainbow Media plans to start an ad campaign for Mag Rack next month.

Key Takeaways:

• Free video-on-demand services are expanding rapidly, with companies like Comcast Cable, Gemstar-TV Guide International, and Music Choice launching new services.
• These services are seeking advertisers to help support their growth, with companies like Kellogg Company's Cheez-It brand and Geico already on board.
• Advertisers are looking for more targeted and niche marketing opportunities, which free video-on-demand services can provide.
• Media companies like Music Choice are optimistic about the future of advertising on these platforms, citing the efficiency and reduced waste of traditional commercials.
• Rainbow Media is launching an ad campaign for Mag Rack next month, which includes ads in trade publications, outdoor billboards, mass transit ads, and street-level marketing tactics.
• Nielsen Media Research has developed a plan to measure audiences for on-demand programs, which will be introduced in the second quarter of 2006.

Statistics:

• 8.5 million digital subscribers have access to Comcast Cable's free on-demand services.
• Music Choice has 45 regular channels, which play uninterrupted songs in genres like rap and show tunes.
• Geico has contributed modest sums to place ads on-screen next to artist and album information on Music Choice's channels.
• The Music Choice video-on-demand component of ad campaigns can reduce waste by failing to reach uninterested audiences.
• Mag Rack will reach a highly targeted and engaged audience of 24seven Gamer program viewers.
• Nielsen Media Research plans to introduce a plan to measure audiences for on-demand programs in the second quarter of 2006.

Sources:

• Comcast Cable
• Gemstar-TV Guide International
• Music Choice
• Rainbow Media
• Details magazine
• Nielsen Media Research