Video on demand (VOD) services have been promised for over twenty years with analysts agreeing that for VOD to be successful, consumers must have access to the same breadth of content they do at their local video stores and on multi channel TV.

The closest we have come to this vision are services deployed across proprietary networks such as Tiscali’s Home Choice or set top box solutions offering near video on demand (NVOD) download services such as Sky Anytime and BT Vision. These services offer a limited range of programming from catch-up TV to full movie downloads only available to subscribers, all of which take time to access and are high in cost.

We are now starting to see genuine real-time VOD services delivered via PCs and set top boxes that are not dependent on subscriptions to dedicated services or networks. This is precipitating a massive explosion in channels; YouTube and Myspace have demonstrated that there is an audience willing to watch low quality video online.

New services such as Joost, Bablegum and Jump utilising TV quality streaming technologies are aggressively acquiring content and eyeballs, with Joost officially launching at MipTV in Cannes this month.

Other distribution channels focus on special interest programming. These may generate an audience with a similar size to those offering a wide variety of programming, but the more successful will attract medium size audiences with a niche interest.

Implications for advertisers

This proliferation of internet video could result initially in thinly spread and speculative media planning. So, what can be done to avoid wasted spend and negative ROI’s?

Advertisers have already invested heavily in developing their online presence, and online communities are opening up the opportunity to deliver their own internet VOD services. With high quality internet, video brands can now take full control and acquire or commission programming for their customers (Audi already do this on satellite TV; take a look at Sky Channel 884). In the near future once these channels are established they could even syndicate their content back to the winning aggregator or network.

Agencies are responding to video by establishing teams focusing on development of branded content. Specialists are emerging that combine TV production, advertising and interactive skill sets to help brands extend their online offering to incorporate internet VOD.

Creatively, internet VOD offers freedom from the 30 second spot and, increasingly, a reduction in the cost of media space. Ownership of programming by brands means the nature of internet video advertising will become more targeted, relevant and even episodic as agencies adopt ad serving and content management systems. Complimentary technologies delivering interactivity and “hot spotting” in video will offer direct response opportunities making these messages even more powerful.

In short, traditional TV advertisers should embrace the opportunities offered by internet VOD. It is, however, important to bear in mind that high quality, full screen internet video will require high quality production techniques. When combined with the power of targeting and the accountability offered by the internet, internet VOD will change online advertising forever.

Live video

Online video technologies have evolved away from delivering only on demand programming. It is now possible to transmit quality live video over the internet.

The obvious application of this technology is to extend the reach of live events to a global internet audience. As with VOD, the opportunity also exists for advertisers to acquire the rights to broadcast specific events.

Implications for advertisers

The size of the audience will be defined by the quality of the subject matter. There will be some major successes as well as failures. In choosing to broadcast an event, advertisers would be well advised to extend the reach of something that they already sponsor.

Case Study: Live video – MSN

Digital Rights Management (DRM) technologies give sponsors all the tools they need to extract the maximum value from their investment. Online access to live events can attract huge public interest. The flipside of this is that a surge in visits could result in service failure.

This can be mitigated by issuing electronic tickets for online events. This gives the sponsor complete ‘crowd control’ and the ability to profile the audience from registration data. If the event is popular enough there is the potential to cover cost of delivery by charging for tickets, making the sponsorship opportunity self-liquidating.

In September 2006 MSN announced a partnership with Control Room, the number one provider of live digital entertainment, and the online producers of Live 8.

MSN In Concert, a result of this partnership, is a series of onlineexclusive live concerts featuring today’s hottest artists. Spanning a wide range of genres from hip hop, to classic rock to pop hits the service has something for everyone.

In April 2007 fans of Elton John were given exclusive online access through MSN In Concert to watch his 60th Birthday live show from Madison Square Gardens. Integration with the MSN Music channel also allowed fans to view videos, photos, album covers and highlights from his career.

A great benefit for users and advertisers alike is that the clips are made available both as a live broadcast and later, on demand.

MSN In Concert provides rich new opportunities for advertisers to integrate into and around the content itself. Advertisers can take advantage of display, text and streaming video advertising opportunities, engaging with MSN’s worldwide audience

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