[mythtv-users] Advertisement free tv? Well whats it worth to you?

Dean Collins Dean at cognation.net
Thu Nov 1 16:16:54 UTC 2007

It's not Myth-TV related but I just posted this novel concept about
television advertising on my blog.


I'm interested in what people think about the concept, particularly
would you pay the three time multiple of approx 45c in order for you to
watch something commercial free. Now of course most Myth-TV users are
going to brag I never watch live tv yeh well maybe....but for the rest
of you-what do you think?


If you've got something specific to say you can post it on the comments
section of my blog or just reply here;






Dean Collins
Cognation Pty Ltd
dean at cognation.net
<mailto:dean at cognation.net> +1-212-203-4357 Ph
+61-2-9016-5642 (Sydney in-dial).

P.S. for those of you who prefer on-list discussions I've posted what I
wrote in it's entirety below but the editing is a little out.


Thursday, November 01, 2007

Advertisement free tv? Well whats it worth to you?

Sometimes you have a great idea but technology isn't there. Sometimes
you have a great idea but the market mindset isn't there. Sometimes you
have an idea and well...you're just plain screwed by the competition.

I think I've got an idea that I've been tossing around for a few months
that covers all 3.

It started when I was watching the premier episode of Burn Notice
earlier this year (yeh I know it's trashy but Fiona his girlfriend is
way hot in a "I can handle myself kind of way") so you've probably
watched it at some time too :)

The premier episode was sponsored by DirectTV (a satellite tv provider
in the USA). It's not a new concept, basically they get some consumer
orientated company to sponsor the premier and it's shown in its entirety
without advertisements.

The sponsor gets mentioned at the start and finish of the show and
pretty much by name for the week before hand each time the premier is
mentioned in the 30 second show advertisements.

You've all seen something similar before, but for some reason it got me

How much did it it cost DirectTV to sponsor Burn Notice for an
"Advertisement Free" premier. And what is my time worth to me?

So the question is this;
"What tv do you watch that you would prefer as an advertisement free
show and what is that worth to you?"

So here is where the technology part comes in. When watching cable TV
everything that you are watching except live TV is pretty much cached
into the broadcasters servers.

In addition in the past broadcast headends were limited in the number of
individual streams of "on demand" content they could offer. eg not
everyone could go and watch on demand content at once. Though this has
changed or is pretty close the timeline that 100% of set top boxes can
be watching on demand content.

(oh and if you think that cable companies ears won't prick up when they
realise this concept would drive up on-demand usage and further
increasing their rivalry over satellite tv, then they do).

- how can tv networks capitalise on this?
So I'm watching an episode of House (best show on tv at the moment even
if the original ducklings have moved on). And I really like House the
opening scenes look great I'm enthralled and happy to settle in and
watch for the next 60 minutes (well 45 minutes of content and 15 minutes
of advertisements) and then just when it was getting to the good bits
the first advertisement comes on ....

- and I think my time is worth more than this....

so I push the magic button on my remote and the set top box gives me a
figure (I'm expecting around about 45c - I'll explain the number later)
and I click yes.

The commercial stops, it returns to the House episode and I continue
watching, for the next 40 minutes of uninterrupted tv content and love
every ad free minute. happy with my interaction with House, happy with
my interaction with Time Warner and to be honest not even noticing that
I just spent 45c.

- So what just happened?

It's simple.

*	By pushing the magic button on my remote it told the set top box
that I was moving from broadcast to streaming at that point in time.
*	The set top box told the billing platform to add 45c to my
monthly bill.
*	The content servers in the headend then cut out the
pre-programmed commercials, delivering only the House video content
uninterrupted until the end of the show.
*	At the end of the show the set top box went back to broadcast
and returned me to "normal running time", this is important - I cant
just watch 3 shows back to back without breaks otherwise the headends
would overload and I would cause a rip in the fabric of the time space


Now I could have just have just hit pause on my DVR, gotten up, walked
away for 20 mins, read a book, walked the dog, written a blog post -

But that's not the way human interactions work. Spontaneous, continuous,
one-off content purchases work through the novelty of their immediacy.

That's why it's worth 45c and that's what will make Time Warner more


- So how did I come up with the figure of 45c
Easy, It's my estimation of three times how much each advertisement
earns Time Warner for each subscriber to watch 15 minutes of

With each 30 second spot being purchased for X number of dollars and X
number of viewers expected to be watching any given show the
broadcasters and advertisers can pretty much come up with an expected
number of viewers and what the cost per viewer is going to be. 

Or in my example I figure it costs the advertiser 1c to reach each
viewer for their 30 second spot.


Now this figure is going to vary based on any number of external factors
- how's a show rating, what's it up against, how cold/warm is it
outside, who's doing well in the world series etc etc. but it's
realistic to come up with a fairly accurate number.

Now I'm sure cable companies are going to get greedy, fat and lazy and
try and round this figure up to a $1 per show kind of system but that's
not what i-Mediacy is about (yeh I know the term is a little web 2.0 but
you get the point), it's about replacing the advertisements not
implementing PPV for every show - we're bored with ipod purchases, on
demand purchases, dvd to own purchases. This is about recognising my
time is valuable and allowing me the choice to 'outbid' the advertisers
for my time.


- Why multiple of "three" and what benefits are there for advertisers?
So the first outcry from the 'marketers' is this would be terrible, we
rely on a certain number of 30 second spots to be available in order to
get our message out there. (in fact certain times eg. presidential
season, the available slots often tighten and pricing goes up-or goes
down in non ratings season).

So here's why the advertisers are going to like the idea. When I select
buy, the amount I as the viewer pays is three times what the consumer
company paid for the slot, yes they don't get to advertise their product
but not only doesn't it cost them nothing to advertise they actually get
a rebate equal to the amount of twice what they would have otherwise

So get this, I could spend $200k on a weeks advertising and actually
make money back on my investment (eg for the 100,000 people that chose
not to watch my commercial i made back twice the amount of money they
would have cost me).

- That's the beauty of the novel concept, not only are the advertisement
free viewers getting to watch content for a small - unnoticeable in the
grand scheme of things fee happy.

- And the advertisers are happy because in certain instances they
actually get a refund from the cable networks on the money they might
have spent with them.

- The cable networks are happiest of all. 

*	They get the original 15c cut that the commercial was going to
bring in as revenue. 
*	With diminished spot numbers natural market forces will increase
the average spend per 30 spot. 
*	BUT most importantly with the consumer vendors knowing that
there is the strong possibility that their advertisements will be
usurped will have a natural tendency to overbid on their 30 second
spots. eg trying to outbid the consumer. In doing so the profit point
percentages for the cable operators increases substantially.

This increase per 30second spot must be reflected as a multiple in what
people pay to watch advertisement free. If the figure is a flat rate
they will feel ripped off.

Times have changed, you need to make your content viewing consumers feel
valuable - there are too many alternatives out there (and getting more
enticing by the day). 

By opening the kimono and showing them exactly what you make by them
participating and watching your vendors commercials they will feel
inclusive and more valued. You may even find some brand loyalty at what
a great job the cable company is actually doing.

Well there it is. As far as I can tell from my research it's a novel
idea. i-Mediacy is there as a concept and I'd really like to hear your

P.S. I've also got another idea about how consumers can make money
watching those ads with that magic button....but that's for another time
and another venue.

Posted by Dean Collins at 10:15 AM


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