Ads coming to on-demand TV

New channel from Comcast is latest attempt by cable companies to generate revenue from on-demand programming.

2 min read
Comcast, the United States' largest cable operator, plans to introduce a video-on-demand channel today that will include advertising embedded in the programming.

The new channel, to be called Exercise TV, is the latest attempt by cable companies to generate revenue from on-demand programming, most of which they give to their customers free if they have a digital set-top box.

Already, Comcast customers who watch replays of television shows on-demand typically see the advertisements that ran with the original program. But customers can fast-forward through the ads.

Cable companies have also set up areas where companies can place longer advertisements, similar to infomercials.

On Exercise TV, the ads will be integrated into the programs. Comcast has sold exclusive advertising rights to New Balance, the footwear maker, for several million dollars. This will allow the company to insert its products and logo in and around the programs, initially a selection of 90 fitness episodes.

Matt Strauss, vice president for programming and content development at Comcast, said, "Everyone's trying to find the economics of on-demand when 95 percent of it is given away for free. What we're seeing is this new technology to open the door to develop new forms of content and brands."

Jake Steinfeld, a leader in fitness programming, has taken a stake in the new network, which will also be made available to Time Warner Cable customers. Strauss said he hoped to persuade other sports-related advertisers to become sponsors.

Until now, Comcast has generated little new advertising revenue from the thousands of hours of on-demand programming it gives away, even though viewership has exploded. Last year, its subscribers watched 1.4 billion programs on demand, twice as many as the year before.

Craig Leddy, an analyst at the Points North Group, said cable companies could alienate viewers if they place too many ads in their on-demand programs and make them too much like commercial television.