TV Networks’ Online Ad Inventory Unexpectedly Opens

3 Comments

Thanks to rising online viewership and the nature of broadband audience agreements with advertisers, the major TV networks have a lot more advertising to sell for their streaming programming, TVWeek reports. The situation highlights a major difference in the economics of TV and online advertising: On TV, if a show attracts more viewers than promised, advertisers essentially get “free” exposure on top of what they paid for, as deals cover specific episode dates and times. But online, a network can cease running an ad once it has delivered the number of viewers the advertiser has previously requested. Broadband programs that satisfy viewership commitments more quickly provide networks with more leverage to force advertisers to negotiate another round of sales.

This increased online ad inventory comes at a time when broadcast is fairly tight. So with advertisers having a difficult time finding room within breaks during hit shows like NBC’s Heroes or Desperate Housewives, the networks’ online offerings stand to become even more attractive, though the continued writer’s strike would likely diminish the value for network fare either on the web or TV as original episodes dry up.

With that in mind, networks are under increased pressure to make the most of this sudden opportunity and sell the open spaces available to advertisers for their long-form broadband programming. Right now, instead of paid online ads, many networks are filling time with their own promos as they seek to complete a new round of sales. On average, according to TVWeek, the networks charge $25 per thousand viewers via broadcast, while the major nets’ broadband prices command $30 per thousand viewers.

Online ratings for TV shows: Nielsen Online counts ABC in first place with 10.6 million unique visitors in October, followed by NBC with 8.1 million uniques, CBS (NYSE: CBS) with 6.1 million and Fox with 3.4 million. Depending on how the current experiments work, determining who’s on top could become more complicated. For one thing, NBC Universal (NYSE: GE) and Fox’s parent News Corp. (NYSE: NWS) launched the private beta of their joint broadband programming site Hulu last month. Meanwhile, CBS and ABC have have each made syndication a significant part of their online programming distribution strategy.

3 Comments

Neil

What about sell through rate? All the streams in the whole mean nothing if only 30% are being sold?

Drew

Any idea how this "Nielsen Online counts ABC in first place with 10.6 million unique visitors in October, followed by NBC with 8.1 million uniques, CBS (NYSE: CBS) with 6.1 million and Fox with 3.4 million. " translates into CPMs? If each unique sits through 2 commercials on ABC, that'd be 21.2m impressions or 21,200 Ms @ $30 or $636,000 in October. Whooptido. If I was a net, I'd give it all to the unions up to the 1st million per month.

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