Fox Sweetens the Digital Pot - Article

Fox Sweetens the Digital Pot
Web-Video Revamp Readied for Upfront

By Daisy Whitney

To coincide with the start of the upfront selling season, Fox is revamping how it presents full-episode videos on its Web site this week for shows such as “House,” “Bones” and “Prison Break.” It’s the latest indicator that digital deals will gain prominence this year.

The revamped service will put online shows front and center on the home page as well as mixing them throughout the site. That’s because streaming TV shows have become the top driver of traffic to the network’s Web site.

“In focus groups, the primary reason people come to our site now is for the episode streaming,” said Bill Bradford, senior VP of content and strategy for Fox Broadcasting. They’re coming to catch up on episodes they have missed, he said.

The site makeover, which kicks off April 23, underscores the importance that online delivery of TV shows has gained with both networks and advertisers in the last year. The revamp also gives the network a fresh look to present to advertisers during upfront conversations, where digital sales have become a key selling point.

Last year, broadcast networks made a lot of noise about integrated ad sales packages in their upfront presentations, but digital dealmaking tended to go on throughout the year. This year, they’re trying again to bundle online video as a critical component of larger ad buys. It’s the latest maturation of the Web video business, one that increasingly favors broadcast networks with their top-tier content and access to big brand-name marketers.

Convergence Consulting recently predicted ad revenue flowing into broadcast and cable network Web sites will rise 64% to $2.3 billion this year. That number, which includes online video ads and banners, should rise to $5 billion in 2010.

“Online is becoming a true viable alternative as far as a place to consume our content, so the network is not only defined by the time slots on air, but wherever our viewers are watching our content—online, on-air or on mobile,” Mr. Bradford said.

Fox launched full-episode streaming in January 2007 on sister property MySpace, but it shifted the shows to Fox.com in August because consumers expect to find them there. “It wasn’t really predicted then how wildly successful streaming would be last year. I think advertisers will be more up to speed now that you can truly buy across platforms,” Mr. Bradford said.
In addition to full-episode streaming of most Fox shows (the notable exception is “American Idol,” which is not streamed online), Fox.com also offers promo clips, recaps and some behind-the-scenes videos for certain shows. Occasionally, the network will create additional storylines, as it’s currently doing for “24” via the Fox-created Web series “The Rookie” that features new characters related to the popular show.

That assortment of online video fare will factor into the network’s pitch to advertisers in its upfront conversations. “If advertisers are going to buy into a show, they also want to buy into online,” Mr. Bradford said.

However, if an advertiser wants only online or only TV, Fox will offer them separately.

Mr. Bradford declined to disclose pricing, but said revenue from Web sales is rising.

Integrated packages are important to advertisers because of the fragmentation of audiences, said Greg Sterling, principal with Sterling Market Intelligence.

“The Internet has stolen some of the traditional TV audience. Even though people are still very much watching TV, they are also online and they are distracted, so to get their attention you have to diversify and reach the audience where they are,” he said.

The challenge with online viewing, though, is most network shows still sell pre-rolls as the dominant ad format. Many consumers are resistant to pre-rolls.

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