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Execs: On-demand-TV ads more valuable than live

A viewer watching a week-old episode of "The Voice" though video-on-demand should be worth more to marketers than a live watcher, television executives contend.

"We don't see a discount," said Krishan Bhatia, executive vice president of digital strategy and operations at NBCUniversal, parent company of CNBC. "It could be a premium."

Speaking at the Cable Show 2014 in Los Angeles, Bhatia said he saw no reason why advertisers should pay less for impressions from similar viewers simply because an audience views content in a different way.

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Will.i.am has been a judge on The Voice (U.K.) for two series.
Mike Marsland | WireImage
Will.i.am has been a judge on The Voice (U.K.) for two series.

The comments came Tuesday during a panel where several executives discussed how advertising needed to catch up with rapid changes in video consumption. The shift to on-demand and digital-video-recorder usage has resulted in a steady decline in live TV ratings over the last several years.

Advertisers and TV networks have been at loggerheads over how to handle the change. A few years ago, advertisers finally agreed to pay for impressions up to three days after a program aired, but many advertisements that are shown later are basically given away for free.

A Comcast executive at the event pointed out that video-on-demand viewing has some surprising characteristics that should have strong appeal to advertisers.

"You're really engaged in the content," said Rob Holmes, vice president for advanced advertising at Comcast, owner of NBCUniversal. He added that on-demand viewing tends to draw a younger, wealthier audience with children that uses fast forwarding less during commercials.

Another panelist, Eric Johnson of Walt Disney's ESPN, argued that even sports should have plenty of value outside of live TV even though its content is usually watched in real time.

He said ESPN was experimenting with ways to find more value in real-time content through other forms of video. "We can take clips or highlights and tweet them out," he said. "That's an example of using real-tome content."

Johnson acknowledged that ad agencies could struggle to combine traditional audience metrics like Nielsen TV ratings with newer measures. "The system for better or worse … rejects complicated," he said.

The comments came in advance of so-called upfront negotiations in coming weeks, when advertisers and TV networks work out ad pricing for the year ahead. No advertisers were present on the panel to present their point of view, which almost certainly would have opposed some of the executives.