VoD ad hits set for tenfold growth

The pay TV business thinks it’s about to cash in on a new revenue stream.

A Comcast executive predicted Wednesday at a New York media conference that advertising impressions served within free video-on-demand content will increase tenfold over the next year. This would be a major evolution for a nascent cable/satellite VOD programming sector that, according to a March report issued by research firm TDG, only accounted for 2.4 percent of the 3.6 billion hours of pay TV viewing done in the U.S. during 2010. (Multichannel News produced and reported on the event.)

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“We have 400 million monthly VOD views on Comcast. I’d love to have a dollar for every view,” said Chip Meehan, VP of Western region integrated media sales for Comast, speaking at the Multichannel News/Broadcasting & Cable On Demand Summit in New York Wednesday.

Meehan said Comcast is in the process of working out contracts to sell this advertising time with program suppliers. The cable company has already reached a deal with The Walt Disney Co..

“Once the first couple of them are figured out, you can assume the rest will follow,” he said. “If Comcast and Disney can figure it out you can assume we’ll figure it out with others.”

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The sweet spot is in basic cable programming served over VOD that subscribers don’t have to pay extra to watch. Comcast is looking to share ad revenue with programmers for those views.

To monetize it, Comcast — along with the larger pay TV industry — is developing dynamic ad insertion technologies that allow it to place commercial inventory in a more strategic, granular way. Besides providing for a more lucrative business opportunity, this spares VOD viewers from having to view the same spot over and over again.