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How Much Can You Stand?

November 13, 2009 | Author: Ibex Marketing

I watch Hulu. Do you? If you do, you know that most shows are interrupted several times for advertisements. These typically run 15 to 30 seconds, and aren’t long enough to get to the kitchen for a snack; you’ll have to put the show on pause before making a raid on the refrigerator.

Content providers worry that they’re leaving money on the table, and Turner Broadcasting intends to find out. The company has indicated that episodes of the popular TNT show, “The Closer”, will be provided to cable companies’ “TV Everywhere” experiements with the full load of about 18 commercials per episode that are included in the broadcast airings of the show.

One difference between the Internet and broadcast, however, is that you can record the broadcast to a DVR and then fast-forward past the commercials. Not so with the online streaming, as fast-forward can be disabled during the commercials.

According to an article in the Atlanta Journal-Constitution, cable company Cox Communications has research that they say indicates viewers will tolerate the full complement of ads.

I don’t know how this is going to play out. Clearly, some viewers would rather not watch commercials and will go to great lengths to avoid them. I expect that we’ll eventually see multiple tiers of service offered, just as we have now in the movie rental market. At Blockbuster, for example, you can rent individual movies or you can get a Netflix-like subscription that lets you get multiple movies for a monthly fee. For streaming video on the Internet, the choices could be “all you can eat” for a monthly subscription, pay-as-you-go for individual shows, or free service where shows are laced with a load of unskippable ads. The big question for me is whether we’ll see these tiers offered within a single service — such as Hulu — or will there be a Balkanization of the market where certain shows will only be available through certain services. I think the first solution will be the most successful, but it will take time before the industry shakes out enough to get behind a single solution.