The recent announcement that NBC Universal and News Corp. will team up to launch a website that will feature full length TV content from a variety of networks heightens the convergence of TV and the web and opens up new opportunities for advertisers who are going beyond traditional TV spots to create branded content ads that run with TV content online. The new ads are “fantastic,” according to David Tochterman, the executive VP/executive producer of ChannelBlast, a new Internet TV venture, and a television veteran who developed hit shows such as That 70s Show and 3rd Rock from the Sun as VP for the Casey Werner Company. He discusses the vibrant Internet TV scene and its repercussions for advertising with iSPOT.
iSPOT: ChannelBlast plays original TV style content online, but many operations play standard TV content, from network websites to the new site from NBC and News Corp. to Joost, Veoh and YouTube. What is the significance of all these offerings?
Tochterman: It brings up a host of issues. Clearly, the consumer is rising further up the food chain as a result of content that can be viewed anytime anywhere. You don’t need to have TiVo, you can go to the ABC website and watch Desperate Housewives anytime you like. It’s a huge game changer. When the audience can watch the content at their leisure in whatever format they choose, it brings up a host of questions about the value of content going forward. The financial model of TV is based on syndication and that’s the biggest question facing the industry in years to come. If content is available on demand, does it still have the same value in the syndication marketplace?
iSPOT: With the popularity of YouTube, short clips seem to the standard for viewing TV content online. Will the other ventures be able to succeed with long form content?
Tochterman: YouTube has a lot of imitators and they all get a certain amount of audience, but eventually they won’t all survive in the current form. At some point there’s only going to be so many user-generated content websites. The growth of the multi-platform world continues to be fueled by professionally produced content. That’s what people want. And I don’t think anyone’s proven you can make original TV content for mobile, the dollars available don’t justify producing it, although that may change when you see Verizon and MediaPlus creating a way to deliver TV content to the mobile device.
iSPOT: What kind of TV content is most popular online?
Tochterman: Music, movie clips, sports and comedy to a lesser extent.
iSPOT: What are the prospects for advertising in the online TV environment?
Tochterman: The real bull’s-eye for advertisers is marrying advertising with content in all kinds of ways. You see it happening slowly and in some cases quickly. I believe ultimately you’re in a world where consumers are not disposed to pay for content so I think the advertiser supported content will occupy a bigger slice of the pie going forward. Contextually relevant branded content is starting to show up in a lot of places. It’s the beginning of a revolution in how content will be created on behalf of brands and advertisers. It’s long term, long form or short form content that is made on behalf of advertisers and brands. It’s the most exciting sector in the business right now. We’re doing it at ChannelBlast and you see other examples of it, like the Dove campaign with Desperate Housewives, that’s overtly associating the brand with a known commodity. You’re starting to see more of it show up.
iSPOT: Where are all these creative concepts coming from?
Tochterman: A variety of places, from the brands and media agencies like MindShare and Ogilvy that are taking the lead in this space. They’re producing a handful of projects for Unilever on behalf of Axe and Degree deodorants. They put out one called CTU Rookie associated with the show 24 for Degree; it’s fantastic stuff. It’s not overt product placement and it’s similar to ChannelBlast because the show is the product. It’s a flip on product placement. Instead of the product existing within the show, the show is actually the product.
iSPOT: So there’s hope for advertisers in the online TV space with these new executions?
Tochterman: The audience is being bombarded with this stuff. Most people online are an advertiser’s worst nightmare because they click off everything they can and do what they can to avoid being advertised to. Advertisers need to find a better way to get their message across.
iSPOT: But isn’t there an advantage to playing ads online because they can’t be zapped like standard TV?
Tochterman: Yes and no. You’re always going to have to be aware of advertising creep. At some point ads will have a negative effect because there’s only so much advertising people can stand. But they will be able to tolerate it more with these new forms of advertising. It’s still in the experimental stage. If we have this conversation a year from now, it will be completely different. The rules have yet to be written.
