The next frontier

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Mark Wardle, VP of Innovation Programmes, BT.

An increasing number of broadcasters are looking to distribute their content via the internet to increase their audience share and create new revenue streams. John Parnell looks at some of the legal, commercial and technological challenges associated with establishing online TV services.

Online TV (as opposed to IPTV) is moving rapidly into the mainstream with major broadcast networks and associated content providers looking to make their content available to as many people as possible. The simplest way to do this is to offer it for free.

To date, many of these content providers have launched services using a wide variety of business models and access approaches.

The past twelve months has seen a number of significant players establish services including the BBC and News Corp/NBC Universal, the latter of which combined to launch Hulu, which boasts content agreements with MGM, Warner Brothers and Sony Pictures Television.

Content is offered to US internet users to stream for free with the platform using a fully ad supported model.

Speaking in April, NBCU president Jeff Zucker revealed that Hulu has sold its entire advertising inventory despite only having come out of an 18-month beta period on March 12 this year.

"Based on early projections, we were indeed sold out of ad inventory. Fortunately, traffic numbers have exceeded our early expectations and we are well-positioned to bring on new advertisers. We've already added new blue-chip advertisers since launch including Proctor & Gamble, Bank of America and Nissan, among others," claims Hulu corporate communications spokesperson Christina Lee.

While online TV offers the same level of control over targeted advertising as is possible with IPTV, there can still be a degree of focus with advertisers able to tie their brand with a specific genre, keyword search or even an individual programme.

Lee says that Hulu is currently working on the development of location-based targeting and other techniques.

The format of the advertising on Hulu is particularly interesting. Viewers are given more control over the length and format of the adverts they watch.

"A user can choose to view either a long-form movie trailer at the beginning of the programming, or watch a series of short-form commercials during the content. If they choose the trailer, the content is viewed without ad interruptions, though they will see periodic overlays.

Otherwise, they'll see commercials during breaks throughout," says Lee. "Hulu is one part in the big picture of how individuals are beginning to consume content on their own terms," she adds.

Another degree of freedom is afforded to viewers with brands or manufacturers giving viewers the option of which advert they watch.

"This is great for advertisers with several products in a line. For instance, a car manufacturer promoting its range of sports cars, SUVs and sedans can let the viewer choose to watch the ad they are most interested in. The user gets some choice and control and it's a good feedback opportunity for advertisers," says Lee.

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