Would you pay premium for commercial free TV?

iTunes offers downloads of popular television shows for $1.99. I love them because they're easy to skip through and free of annoying commercials. I can watch them any time I want on the laptop, which comes in handy during three hour layovers in places like Chicago. ABC's popular hit show "Lost" is my personal favorite... it's almost always in the iTunes top download category.

ABC recently announced that it will offer free downloads of select programming, including "Lost". The catch? Non-skippable commercials.

And so I ask... How much are you willing to pay for commercial-free television programming? I dunno … To me, the buck ninety nine to forego them seems worth it.

So, you don't download? Perhaps maybe you think this doesn't apply to you? Well, as the lines between our computer networks and TV become blurred, the model may well apply to you in the future!

Commercial skipping and freedom of choice were a big reason why I bought a TIVO six years ago - that, as well as the ability to watch what I want, when I want. It's the way things should be!

There will always be a market for on-demand, full choice programming. It's what the majority of people really want. Sony/TIVO gets this, and as an emerging media company, Apple also recognizes and responds to this. The networks and the advertisers, on the other hand hate what's going on and seem to be fighting it using the methods below to deal with next-generation advertising:

1. The industry is working on technologies that will limit our ability to skip commercial advertisements for DVRs and the web. While this is likely to make the advertisers very happy, it will inevitably alienate the people who have invested in choice enabling technology. In the end, this approach is not likely to work out very well for anyone.

2. They're becoming more intelligent about careful advertising sponsorships. Today, it's almost expected to see Oprah or Dr. Phil giving away everything but the kitchen sink. ABC partners with Sears give away new homes stocked with high end appliances to people in need on "Extreme Makeover: Home Edition." It not only works for the advertisers - it works for the people watching, who feel better by association. It's a win-win.

3. They're getting more aggressive about embedded and interactive advertising. This is the new frontier in advertising really, although the principal has been around for years. E.g. How often do you see that Coke can sitting on the table in popular TV shows and movies? They may as well shape the stage of "American Idol" with a coke bottle... Embedded advertising is beginning to morph into a less subtle form. We're beginning to see the networks using non-skippable embedded ads that comprise all or part of the lower 1/5th of a screen. I saw one for "Swiffer" the other day. It was an annoying animated ad that appeared during live programming and was incredibly distracting. It certainly failed to contribute to positive brand association for me. Interruptive advertising isn't likely to enhance the television experience in the long run - and it's archaic compared to the possibilities offered by new technologies that can make embedded ads and sponsorships even better - and maybe more effective.

For example, if you've got a DVR, you're likely to find embedded advertisements and programming in various menu areas. It's also becoming more common to find interactive icons that display during commercials which invite you to "learn more". If your DVR is connected to your network, you'll have even more options. Individuals can download and participate in games, contests, promotions right from the TV. So far, the execution in these areas isn't real compelling. Heck - Nielsen just added DVR viewership to its rankings, so that's not surprising. So, there's still a lot of work to be done in this arena of advertising. The big challenge for advertisers addressing the new paradigms will be making embedded advertisements and promotions visible and compelling --> yet less interruptive and annoying.

It will be interesting to see this all shake out... just how much people are willing to pay - just how far they're willing to go - for commercial free programming remains to be seen.

What's the lesson for those in the biz? The customer rules! TIVO and Apple have gained a tremendous fan base by acknowledging the consumer's need for choice and flexibility. The networks often work against this dynamic and fail to leverage new technologies effectively to create really compelling "packages" for consumers. As a result, they simply have viewers.

In reality, many of us have been paying for commercial free programming for years - on pay channels like HBO, Cinemax and others. The times they are a changing, however. Watch HBO today and you're likely to see plenty of commercials between movies - from network promotions, ads for upcoming programming and "making of" film trailers and coming soon promotions for new films (on the network or in the theater). Furthermore, getting movies is now so cheap and easy, many viewers simply don't need those channels as much (unless you're addicted to HBO programming like "The Sopranos"). We can pretty much watch movies any time we want with on-demand programming, our own home DVD collections, Blockbuster or Netflix.

As things change, what's most important as the media companies pioneer the advertising and sponsorship models that drive modern day television programming is customer centricity. Sears and ABC understand that people want to feel good - and they leveraged the heck out of it (along with other advertisers) to create Extreme Makeover: Home Edition. But they still haven't figured it out entirely. On the other hand, ABC has a pretty sophisticated advertising model on all their sites - which makes advertisements extremely overt. While this works for the advertisers, it's also exceedingly annoying for the consumer, as ads are displayed on or before almost every page of the site. Contrast ABC's advertising model with say, VH1.com to note the real difference!

My thought on commercials, television and choice: Find a way to give the people what they want, and do it with style and creativity better than the competition. Putting people first will yield a fan base that allows you to charge your advertisers (and, if they're willing to pay, your customers) a premium price that will push you ahead of the pack. :-)





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I’m Leigh Durst, a 20 year veteran in business, operations, customer strategy, ecommerce, digital & social media and marketing. Simply put, I’m a strategist that helps companies (start-up to blue chip) achieve business shift, create more compelling online and offline experiences. I also write, speak and teach about experience design and next-generation business. I’m a futurist, visionary, strategist, doer and connector with a passion for people and helping others. When I’m not on the road, you’ll find me in the San Francisco bay area, working, beaching it and hanging out with my family and dog.


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