On-demand services have become an increasingly popular offering for cable companies, since they give viewers long-desired power over what they watch and when they watch it, with the ability to avoid annoying advertising pitches as a bonus. But Comcast (NASDAQ:CMCSA) is ready to shake things up a bit -- it's aiming to make some extra cash in the on-demand realm. According to news reports, Comcast plans some video-on-demand content that will include embedded advertising.
Comcast plans to offer its subscribers an entire on-demand channel on which advertising will be woven into the programming itself. The channel, called Exercise TV, will offer viewers 24-hour fitness programming developed by Jake Steinfeld of Body by Jake fame. Instead of commercials, advertising will occur within the segments, with graphical overlays and product placement mixed with educational video segments. The channel was developed with advertiser New Balance, as well as Time Warner's (NYSE:TWX) Time Warner Cable, where it will also be available to viewers.
I can see why a free channel called Exercise TV might be a great idea in a nation where so many people are overweight and underbuffed. Exercise- and weight-loss-related products and services are big, big business. Consider, for example, NutriSystem (NASDAQ:NTRI), which recently said that it expects to report quadrupled revenues in 2005. (In deference to the subject matter of this article, it's worthwhile to note that a good chunk of its revenues came from home shopping network QVC.) NutriSystem's stock price has increased by 1,000% in the past year, so investors have definitely taken notice. Investors have also taken notice of eDiets.com (NASDAQ:DIET), which lately has been flirting with new 52-week highs.
As for Exercise TV, what better way to get couch potatoes to exercise than to offer them a way to easily access fitness instruction right from their couch? (Drop and give me 20!) Exercise TV shows will concentrate on such hip fitness trends as Pilates, yoga, and tai chi, among others.
On the other hand, one can only hope that the advertising doesn't come across as too heavy-handed. If the advertising isn't pulled off deftly, it could feel like the equivalent of the dreaded infomercial, which many people consider the bane of late-night TV. (Jake Steinfeld, of course, is no stranger to infomercials; Body by Jake has done a few.)
Services such as Motley Fool Stock Advisor selection TiVo (NASDAQ:TIVO) changed the landscape for TV advertising. The digital-video-recording pioneer made it easier than ever for viewers to time-shift TV programs and fast-forward through ads. The public's increasing leeriness to heavy-handed advertising is a lesson that companies need to learn, and learn well.
Sure, Exercise TV is free, and most people have come to realize that "free" is a bit of an oxymoron in a world in which advertising subsidizes most free content. However, the runaway popularity of ad-free and on-demand content shows that people don't like being constantly subjected to marketing messages that they don't ask for and aren't interested in. That's where TiVo's plans for such things as opt-in advertising also take a brilliant turn. (It also takes a page from Google (NASDAQ:GOOG), as my Foolish colleague Tim Beyers has pointed out.)
It hardly seems like a coincidence that Comcast recently celebrated a milestone: By last October, viewers had ordered up more than a billion programs through its On Demand service in 2005 alone. It's certainly no surprise that with that kind of success, Comcast would consider it high time to figure out a way to drum up some revenues. However, too much inescapable marketing might make Exercise TV an exercise in futility.
Further Foolishness on demand:
- Flash back to when Comcast's On Demand reached the 1 billion mark.
- Last spring, TiVo tuned in a few patents.
- Tim Beyers pointed out that TiVo's been channeling Google and then suggested that Google buy TiVo.
TiVo and Time Warner are Motley Fool Stock Advisor picks. To find out what other companies David and Tom Gardner have recommended since April 2002, take a 30-day free trial by clicking here .
Alyce Lomax does not own shares of any of the companies mentioned.
