Warner Cable COO: TV,TV Web Ads Should Be The Same

COO Landel Hobbs commented during an interview Wednesday at the National Cable & Telecommunications Association’s annual Cable Show in Washington.
New York-based Time Warner Cable is leading a push to get cable networks to tie viewing of TV shows online to a video subscription associated with a cable, satellite or telephone provider.
Hobbs said his company’s effort, called “TV Everywhere,” seeks to expand opportunities for programmers and distributors alike rather than “defend an old model.”
Cable networks have two primary ways of getting revenue: advertising sales and fees paid by cable, satellite and telephone companies that provide video services.
“It’s true for broadcasters, too, though they say they only get revenue from advertising,” Hobbs said. “But they get retransmission fees from video service providers]. So this dual revenue stream is important for everybody.”
Fears that consumers may be increasingly inclined to do without video subscriptions have been voiced by many cable executives.
Hobbs added nothing will ever top the at-home TV viewing experience, but people will be more inclined toward “place-shifting” – seeing content on different devices and at times they choose.
Right now, the money programmers generate from online video advertising is fairly tepid, making the decision to put so many shows online a baffling one, Hobbs said. To help remedy that situation, viewers should see the same commercials during television shows on the Web as they do on traditional TV, Hobbs asserted.
At sites like Hulu and others, shows are seen with limited, short commercial breaks, compared with more frequent and lengthier groups of ads on TV.
Programmers might be more amenable to such an arrangement, Hobbs added, if they can assure advertisers that the same ads they run on TV will be viewed on the Web. Asked about a potential backlash from consumers accustomed to fewer ads during online streams, Hobbs expressed little concern.
“What we find is that people don’t mind ads,” he said, “but they say, ‘Give me the convenience of watching when and where I want to.'”
Addressable advertising, which would target viewers’ interests specifically and show them only ads deemed relevant those interests, is part of the key to such a plan, he commented.
Hobbs acknowledges some people will balk at the idea of not being able to watch shows online without having to subscribe to a video provider, but this can be remedied if cable were to do a better job overall of explaining its value proposition to consumers.
“Cable does have a perception problem. But we really just have to educate, talk to people, and concentrate on creating a better customer experience,” he said.

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