Broadcasters Mull Their Own Web Video Ad Nets

The big broadcast networks are exploring whether to become Web video networks in order to broaden their reach in the growing marketing for online video advertising.

According to multiple sources, several of the top-four TV networks are exploring ways to sell ads in video content they do not own and that runs on other sites, such as music videos, Web series and even video clips from other cable networks. For example, CBS has a partnership with the music site Vevo via which both companies sell ad inventory on the Web show Live on Letterman on their respective properties. CBS officials are said to have considered the idea of either expanding that partnership or seeking similar deals (though Vevo officlals say there are no plans to allow CBS to sell any Vevo avails). CBS has even talked to several of the leading online video ad networks and is finding ways to increase their supply, per sources.
In theory, the networks could bring to online video their deep relationship with the biggest brand advertisers. At the same time, they would be able to greatly expand their sales reach, which is at the moment limited since their own sites are relatively small players in the Web video market. According to comScore, while Hulu delivers more video ads than anyone on the Web, none of the networks’ Web sites land in the top ten when it comes to streaming ads.
The inventory crunch might soon get even more pronounced. CBS, NBC, ABC and Fox are considering steps if full-length episodes of their top shows are no longer free to all users. Fox has already taken that step. It announced that viewers will need to prove they are cable subcsribers to stream hits like Glee — or else they’ll have to wait eight days to stream episodes online. Many expect all of the networks to follow suit.
A source familiar with the discussions said as much as 70 percent of the views networks generate with their hit shows happen within the first 7 days after they first air. So a falloff in views is likely.
The thinking at the networks is that they are the trusted experts when it comes to selling to top brands and will thus have an advantage of Web video ad networks like Tremor Media, YuMe and BrightRoll. Another theory is that broadcast networks would be best poised to nurture Web originals produced by production firms like Google’s Next New Networks.
MTV is already testing this strategy. Several years ago the company launched Tribes, its alternative to an ad network. MTV sales executives can sell inventory on a host of smaller sites and blogs which reach similar demographics as its networks. Just recently MTV began selling video inventory on Warner Music Group’s various artist Web sites. Now it seems as though CBS and others are looking to follow suit.
There are major challenges. For one, the Web video market isn’t exactly brimming with top-quality content. Much of the inventory available on networks and through exchanges is from the scruffier side of the Web. Network sales teams are also not well versed in the world of ad networks. It’s a different proposition.
That’s why some expect that if faced with a Web video shortfall, many of the broadcast networks will renew efforts to produce original scripted Web series with larger budgets. NBC Universal recently shut down its original Web video studio. A source said that CBS has talked about producing Web shows with larger budgets on a quarterly basis.
“They do have access to the best talent, and they know how to promote content,” said the source. “They need better content or otherwise they are going to run out.”
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