watchingcomputer.jpgAt the end of this AdAge piece on the transformations the movie rental has recently gone through and the changes ahead of it, writer Brian Steinberg makes the completely valid point that people don’t really want or need another set-top box. That’s important since a lot of these moves include just that.

He also writes:

Should consumers adopt these technologies, the next question will be whether they will welcome advertising adjacent to the video they pay to watch in comfort. The solution won’t be running pre-roll video ads before a downloaded video starts to run, said Universal McCann’s Mr. Cohen. Instead, he added, it could lie in figuring out what type of consumer is doing the downloading, then delivering a message targeted at that individual.

Funny he should bring that up…

A recent panel of network and studio executives at CES expressed the growing opinion, given form by a number of business decisions, that ad-supported free content online is going to win out over paid downloads. People, they find, are willing to tolerate ads in their streaming content if it means they don’t have to pay outright for it.

The studio panelists then make a number of startling admissions.

  1. They’re making money off of digital downloads. It isn’t up to what they make through traditional distribution yet, but they’re not losing money. (Don’t tell the writers)
  2. That even includes Apple’s iTunes. (Don’t tell..well..anyone)

Wow. This is like my dad admitting that Ford cars do in fact have their good points.

In all seriousness, though, I think that executives admissions that this is something they’re moving toward is a good thing. Hulu, various network sites and other distribution points have primed
the audience for this free-with-ads model and it seems to be gaining traction. If the market has adjusted to the point where ad support of free content is generally accepted then that’s the direction they should skate in, though the notion of download-to-own shouldn’t be totally abandoned. Right now the technology is simply not up to that task. But it will be, and content producers should be ready to serve that customer niche as well.

But getting back to advertising in the content, both producers and advertisers should remember that it’s the audience experience that should come first and foremost in prioritizing goals. Producers should not give advertisers carte blanche to infiltrate the experience since it’s eventually going to lead to the same sort of backlash that gave rise to sales of DVD box sets and paid downloads. Measurement and tracking of content as it crosses media platforms will tell everyone involved what sorts of ads work and what don’t, leading to a better experience for everyone.