Cox channel tunes in to advertisers
Make way for the newest form of the infomercial. Cox Communications turns on a digital cable channel devoted solely to advertisers? original programming.
The Atlanta-based cable TV and Internet service provider said it began testing an advertising on-demand service, called FreeZone, for San Diego digital cable subscribers. Those Cox customers can turn to a designated channel, without cost, to view content developed by a host of advertisers, including Kraft, Coca-Cola, Sony Music Entertainment's Epic Records and Volvo North America. Cox plans to test the service for six months.
The programming, or long-form ads, will be much like infomercials, ranging in length from 5 minutes to 30 minutes, and will feature lifestyle or entertainment related to each brand. Salomon Sports, for example, is airing a video on extreme inline skating; Sony is sponsoring music videos of artists on its Epic Records label; and Volvo is broadcasting an ocean race, coupled with material on its new sports utility vehicle. In some cases, viewers can request information on products or services.
The experiment is the latest in a race to push on-demand programming to digital cable subscribers. Most of the major cable providers are testing video-on-demand services for digital subscribers in some markets, with plans to expand such services as pricing models become clear and consumers grow comfortable with expanded viewing options. Other providers have plans to introduce advertising-supporting VOD in the next year.
Still, FreeZone, a channel devoted to advertisers' original programming, could wear thin in a sea of cable channels and niche broadcasts.
Yankee Group media and entertainment analyst Aditya Kishore said that despite its would-be usefulness for product research, the channel isn't likely to draw many consumers.
"If I want information on jet skis I?m not necessarily going to go to the manufacturer to get it," Kishore said. "I'm more likely to go to a third-party."
The move follows Cox's test in April of a movies-on-demand service in San Diego. That service, called Entertainment on Demand, is now in full swing, letting viewers choose among 150 films to watch immediately. Viewers pay up to $3.95 per film and can control the playback with DVD-like features such as fast-forwarding and pausing. Cox is using the same server technology for its advertising-supported service.
Later this year, the company also plans to introduce a subscription VOD service in two markets, but it has yet to set pricing.
With FreeZone, viewers can choose from a list of sponsored content available from different advertisers, which can "present customers with information they want outside the set 30- to 60-second commercial, either entertainment related to their industry or something informative," Cox spokesman David Grabert said.
Eventually Cox plans to offer FreeZone in other markets where it offers VOD. Apart from San Diego, Cox expects to introduce VOD in two additional U.S. cities this year, but would not name which markets. The company sells digital cable service in 26 markets including Orange County, Phoenix, New Orleans and Oklahoma City.
The technology to deliver FreeZone enables Cox to report on the success of the advertisements, Grabert said. For example, the technology can tabulate in aggregate how many people viewed the long-form commercials. In addition, Cox can supply a viewer's address and phone number, with the customer's permission, to the advertiser.
For its part, Cox hopes to make FreeZone an additional source of advertising revenue for its company. "It's another way to sell advertising on our system," Grabert said. "The way people watch TV is in the process of changing right now, and on-demand is going to revolutionize viewing."