The channel represents another small step in the evolution of video-on-demand and advertising strategies.Comcast Corporation, the largest cable television provider in the United States, announced Wednesday the launch of a new VOD (video-on-demand) channel that will contain embedded advertising.
The new channel, called Exercisetv, is the company's first attempt to generate direct ad revenue from on-demand programming, most of which they offer to their customers for free.
Comcast customers watched over 1.4 billion on-demand programs last year, more than doubling viewership from the year prior, according to the company.
"We think this is a pioneering move," said Steve Burke, president of Comcast. "There is a coming future where time-shifting on multiple devices will become more prevalent."
Jake Steinfeld, of the Body by Jake brand, has taken a stake in the new network, which will also be made available to Time Warner Cable customers.
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To date, Comcast has generated little new revenue from the thousands of hours of on-demand programming it offers to its customers.
The company's three basic business models for on-demand are transaction-based, subscription-based and free ad-supported content.
Comcast customers who currently watch on-demand programming see the original commercials that ran with the program, although they can fast-forward through the ads.
On Exercisetv, the ads will be integrated into the programs through product placements. Comcast has sold exclusive advertising rights to footwear maker New Balance, which will insert its products and logos into a selection of more than 90 fitness episodes.
Programs on Exercisetv will not carry traditional ad spots.
"The in-program messages will not be in-your-face ads," said John Larson, president emeritus of New Balance. He added that the embedded advertisements would be "subtle."
Steinfeld explained the embedded ads as "like a pop-up, but cooler."
Comcast has been very aggressive in pushing VOD services, according to Aditya Kishore, director of media at The Yankee Group. VOD is a significant competitive advantage against satellite services, such as DirectTV, which face technological hurdles to supplying on-demand content to consumers.
The practice of embedding advertisements is not new, but Comcast is the first cable operator to fully brand a channel in that manner.
"It's an ad model that's very much in evolution," said Kishore. "There's a need for some kind of structure in this space."
The Exercisetv programs are also available on DVD for approximately $14.99 each, according to the company.
Comcast said that it plans to sell branded merchandise seen on Exercisetv on the channel's Web site, www.exercisetv.tv.
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