Our news editor talks to execs from Disney/ABC, AOL and other industry experts about mobile TV and what it means for interactive marketing.
On October 13, 2005 Apple Computer Inc. and ABC made history by selling episodes of ABC's television series "Lost" for $1.99 through Apple's iTunes Music Store. It's important to note that sponsors and ads were removed from the downloadable version of "Lost".
The deal between Apple and ABC was a cross-promotion. First, it signified the first time a show was made for legal downloading over the web right after it aired. Second, the availability of "Lost" through iTunes promoted the recently launched iPod Video.
Apple's partnership with Walt Disney Co, the parent of ABC, also includes episodes of the popular "Desperate Housewives," "Night Stalker" and That's So Raven."
What's interesting is not only the mobile aspect of this deal but also the questions and implications this deal means to interactive advertising and to the entertainment industry.
Several questions come to mind:
- How to marketers participate in this new channel?
- What does this signal in terms of media consumption habits?
- Will consumers be willing to pay for this type of content?
"The Apple deal with Disney-ABC basically offers an additional way to make some of our content portable," Albert Cheng, executive vice president of the Digital Media Group, Disney-ABC Television group, told iMedia.
"These downloadable shows are supplemental and drive more awareness around the shows. It offers another opportunity for viewers of the shows to stay current. It's not a substitute but an enabler," adds Cheng.
When asked about ad opportunities for marketers on these downloadable shows, Cheng says, "The Apple partnership is one type of model -- paid media -- but we are open to other advertising models. We recognize the great ad partnership we have, but the question is how do we create a platform that serves advertisers well."
About the implications these new mobile content bring up such as guild, distribution and sponsorship, Cheng comments, "We're still working out the implications of the guilds. Second, I think the message we are sending is that this video content is being pirated where nobody gets to see it. By offering some of our TV content on the Apple iPod Video we can be proactive in a market that -- due to illegal download and piracy -- currently doesn't let us participate."
In a recent Los Angeles Times article, David Colker, in his Technopolsis column, reviewed the new iPod Video content from ABC. He writes that "although it will never replace a full-size television, it is likely to appeal to anyone who wants to watch TV shows or other videos while commuting on mass transit, traveling, sitting in waiting rooms or working out on a treadmill."
Although Colker, in his article, urges consumers to wait a bit to purchase an iPod Video due to the meager content, his overall review of the content and player is positive.
On October 31, Apple announced that its iTunes online service has sold a million videos in under 20 days -- proving that consumers are willing to pay this mobile VOD content.
"Selling one million videos in less than 20 days strongly suggests there is a market for legal downloads. Our next challenge is to broaden our content offerings," Apple CEO Steve Jobs said in a statement.
During the same week Apple launched its iPod Video, another company, EchoStar Communications Corp and its DISH Network satellite TV service, rolled out its PocketDISH. The device is basically a portable digital video recorder (DVR) that also plays MP3s, stores and displays photos.
"Our content is more immediate than the content Apple iPod Video provides. For example, if you're a DIRECTV or Dish Network subscriber, you don't pay for the additional content. You're already paying for it so all you have to do is download it to your PocketDISH. This is another way for you to enjoy your content," says Mark Cicero, spokesman, PocketDISH.
Like TiVo and other DVRs, PocketDISH users have the option of fast-forwarding through the content -- including ads.
When asked about the opportunities marketers have with PocketDISH's mobile video content, Cicero comments, "As far companies possible preloading content on the PocketDISH, such as sponsored content, we can't discuss that as it's too early in the game."
But it's not just ABC and DIRECTV getting into digital mix. Recently Warner Bros. film studio reorganized its home video division with an emphasis on internet, wireless and other digital technologies. The new unit will be called the Warner Bros. Home Entertainment Group and will be run by Kevin Tsujihara.
Although they haven't disclosed any mobile VOD plans, it's clear that they are looking towards digital and mobile aspects when Tsujihara told Reuters, "We were organized based on very traditional windows that had been in place for 20 years. Consumers are saying they want more convenience and more portability and we needed to be responsive to that."
During the first week of November, Sprint Nextel announced that excerpts of NBC's "The Tonight Show With Jay Leno" will be available for download by Sprint mobile customers. Sprint TV Live was launched in September as part of a $9.99 per month subscription. The service also includes live feeds from the Weather Channel, MSNBC, Discovery and Fox News Channel.
"Apple's success certainly reinforces the view that there is a demand out there. How big? It's too soon to say. But it's for real, and it's going to be with us for a long time," Bob Wright, chairman of NBC Universal, told the LA Times.
In October Disney, which is the parent company of ABC, also teamed up with America Online to promote their film "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" through AOL's Moviefone property. Although not intended for a mobile channel, the deal reflects an interest in cross-media campaigns.
"All credit is due to Apple for pushing the envelope with portable VOD," says Erik Flannigan, VP, programming, AOL.
Flannigan says that there will be ad opportunities for this mobile video channel but the notion of video podcasting and mobile VOD has just been born. "Network TV on demand is brilliant because it's portable, but there are so many issues such as rights, music and how to divvy out the $1.99 that Apple is charging for episodes of 'Lost.' But somebody had to go first, and those questions, including advertising, are going to get sorted out."
iMedia Contributor Joyce Schwarz says she speculates that adult content might be the killer application for this new channel, and several adult related sites have started to build content for Apple iPod Video.
The shift of TV to mobile video is still in its infancy, but there is potential for marketers within this channel. As seen with Apple's one million downloads, consumers want this content. Marketers know that the audience is tech savvy, so targeting them could depend on the content. For example, a record company could buy ad space on music videos, automotive companies on NASCAR races, et cetera.
But as this mobile video continues to develop, other questions arise.
- How do marketers track the mobile TV audience?
- Will consumers be willing to pay for content that is front loaded with sponsors?
- Will other networks and studios jump on the mobile TV bandwagon?
- How might the networks charge for commercial time within this mobile channel?
Although Flannigan did not disclose any of AOL's plans for mobile VOD, he states, "We know that we want to get it right when we do. As for advertising, we want to be extremely smart how we weave it into the content."
It's important to watch this technology as it evolves to see how marketing can fit into the mix. Consumers and marketers will be watching this 1-½ inch screen to see what happens.