A storm in a VOD cup?

Ever since he embarked on an informal career questioning some of the more outlandish claims from the online community, the Media Native has been pleasantly surprised at how easy it is to ruffle feathers and generate verbal spats. After last week’s Videology riposte to his TV On Demand article, will the Media Native have the final say?

It seems it’s quite easy to upset people. My recent column on the premium pricing for TVOD was a case in point, and the combative (and highly experienced and articulate) Rhys McLachan came back with a welter of statistics to make the case for VOD.

The problem is, we are not in massive disagreement. As Rhys quite rightly says; “sorry mate, no scandal here.”

Just to set the record straight; I never once argued TVOD did not deserve its current pricing levels (the issue of TV on demand compared to other VOD inventory is for another blog, but for the record I think TVOD benefits from strong channel brands, guaranteed, high quality content and existing trading relationships with the broadcasters, who still dominate the marketplace).

In terms of the current pricing of TVOD, it may be less than the 4-5 times airtime costs I quoted, but I can guarantee it will still be at a healthy premium to average spot rates. My view was that +30%-50% was as much as our existing knowledge of its effectiveness could justify and nothing in Rhys’ argument convinces me otherwise.

If the audience profile is currently comparable to the overall TV viewing profile, as Rhys suggests, then that makes the premium even harder to justify.

I accept that we are sometimes comparing apples with pears, as VOD targeting can be much more granular than broadcast and based on different measurement methodologies, but the CPM for TVOD minutage is still several times higher than average (or even targeted) broadcast CPMs, and I’m still struggling to understand the rationale.

I’m impressed that some TVOD campaigns can add an incremental reach of “up to 4%” – it’s obviously improving from the 2% levels we were seeing a couple of years ago – but really, (to quote Peggy Lee), is that all there is?

Similarly, the fact that a study of 35 campaigns showed a brand recall uplift of 3%-5% (via an online sample, perhaps?) is also a step in the right direction, as is the clickability study from the USA.

But it is hardly definitive, and I stick by my comment that a new media channel reaching a relatively small audience would normally struggle to gain a fraction of the high-reach medium’s pricing, even with this sort of evidence to support it.

But where I agree most definitely with Rhys is that VOD is an exciting new media channel, that it certainly justifies a healthy pricing structure, and that all the metrics suggest it is going to become even more effective in the future.

Just not 4-5 times more effective!