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ONE of the rewards of watching TV online is not having to sit through as many commercials. Now the networks are chipping away at that little luxury, writes Ryan Nakashima.
CBS shows twice as many ads per show on its website as it did last year. The CW network shows four times as many. Dozens of shows from major cable networks now carry as many ads online as they do on TV and it seems that more shows will follow this trend soon.
The online audience is still small compared with television, but it’s growing. Networks hope that by showing more ads, they can make about as much money per viewer online as they do on the tube.
It’s a change from the early days of online video. When ABC started putting full episodes of its shows online in 2006, fans could zip through the hour-long dramas LOST and Desperate Housewives in about 45 minutes. One short ad played a few times per show.
Limiting commercials kept people from going to unauthorised websites to watch pirated copies of shows. It also helped networks reach new audiences in college dorms and teenage bedrooms.
Now, as online audiences grow, networks see an opportunity to make more money. A recent episode of Hawaii Five-O carried six-and-a-half minutes of ads online. That’s less than the 16 minutes on TV, but double what an hour-long show carried on CBS.com a year ago used to have.
Online video has improved in recent years with faster internet connections and better technology. The advances have led some people to give up on regular TV – and hefty cable bills that come with it – and watch their favourite shows online.
The websites of ABC and NBC and some cable channels offer a range of recent episodes online, as does Hulu, a site owned by the parent companies of ABC, NBC and Fox. Other networks offer live sports online. ESPN puts events on ESPN3.com for viewers who get internet service through certain providers.
And NBC put hundreds of hours of live competition online during the 2008 and 2010 Olympics. NBC has agreed to pay $4.4 billion for the rights to televise the Olympics through 2020.
The CW, a broadcast network owned by CBS and Time Warner, now shows four commercials in a typical break instead of one – as many as there are on regular TV. For both networks, viewership online grew anyway, a sign that viewers don’t seem to mind.
The CBS and CW examples show that for big-budget TV productions, at least, it’s possible to make enough money from the Internet to pay for shows if audiences suddenly shift entirely online.
ZenithOptimedia expects online video ad revenue in the US to grow 22 per cent this year to $3.3 billion, compared with just five per cent growth for all TV ads to $59.4 billion.
