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Apple iTunes Video & Advertising

The blogosphere is abuzz with speculation about Apple iTunes video-on-demand (VOD) and potential advertising applications. With around 2,000 music videos, several Pixar shorts, and on-demand ABC sitcoms available for purchase, iTunes may provide an avenue for advertisers to attach commercials to portable media content. However, AdJab raises two important considerations which may limit its potential as a viable advertising model:

There are two scenarios I see here.  First, the shows have their original commercials intact. The upside for advertisers in this is the increased reach they'll achieve by latching on to the portable media. The downside is that campaigns traditionally have a short shelf life so there's not much value in showing a commercial for a sale that ended six months ago. The second option is original advertising that gets attached to the show when it's downloaded. This is more practical as a media buy since time is of the essence. The problem with this is who do you buy the ad time from? The network that produced the show or Apple, who's supplying the distribution method?

Comments posted to the blog quickly rebutted that for-pay video needs to be ad-free. I would argue that this is a short-term move by Apple that will evolve rapidly to include targeted preroll advertising, much like DVD rentals include traditional ad spots. If a bigger pie enables a more profitable revenue split, there's no reason Apple wouldn't evolve iTunes in this direction. And consumers will be happy to trade advertising for the convenience of a portable, on-demand media experience.

The question is whether an entity will emerge that sits between video content owners and iTunes - a media organization that provides a handshake between producers and iTunes that can also broker advertising content and revenue distribution.

Dave, over at Brand Experience Lab, raises a more interesting possibility for in-home, or  "appointment-to-view," television.

If people are willing to pay $2 to watch a commercial free version of their shows on a 2.5 inch screen, would they be willing to pay to watch commercial-free TV? And, if you can download the show to your iPod, shouldn't that mean that you could also play it on your Mac? And then, if they create a simple interface to send that signal to a large screen TV, wouldn't that potentially create an Apple media center that actually by-passes network TV?

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October 13, 2005 | Permalink

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Josh at Splintered Channels ponders traditional ad spots within the new iTunes-delivered TV programs. The TV Ive had for the last 10 years has a 30-sec timer button on it. Hit the button, change the channel, and 30 seconds later youll a... [Read More]

Tracked on Oct 13, 2005 9:57:45 AM

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