Charter, Comcast, DISH Whip Up Targeted Packages

Network operators and content companies increasingly are looking to add new revenue streams by creating special programming packages, which sometimes have the added bonus of enabling advertisers to target potential customers.

Comcast Corp.(CMCSA) and Charter Communications Inc.(CHTR) announced such initiatives just last week, and DISH Network Corp.(DISH) recently aggressively started its offer on this front.

DISH’s TurboHD is an all-HD programming channel package for $24.99 per month. The Walt Disney Co. and Charter have launched a family-focused, $4.99 per month subscription VoD service. And Comcast has teamed with MGM Studios(MGM.DE) to introduce Impact, an action-only free HD VoD channel with pay titles.

While focused-content channels are far from new, creating and offering them as pay-extra add-ons to current TV programming packages just now is taking root. Prior to last week’s frenzy of activity, the most notable instance of for-pay targeted programming was Comcast’s packaging last summer of the NFL Network with other channels in a $7.99-per-month sports package.

“Operators have realized that more narrowly focusing content can drive the creation of additive subscription or pay channels that will also draw strong interest from advertisers,” said Jeff Heynen, directing analyst for IPTV and Next Gen OSS/BSS at Infonetics Research. “Whether they are subscription or pay-per-title offerings, add in advertising and you potentially have multiple new revenue streams.”

Content in subscription services, especially TV shows, often features advertising. A single advertiser typically has a spot at the beginning, middle and end of the show. Users can fast-forward past commercials in VoD shows, but advertisers believe shorter ad breaks and more relevant ads are a more effective way to reach target customers. By contrast, movies are less likely to carry any ads. Instead, they can feature spots at the beginning and end of the programming promoting opportunities to view/buy other movies.

However, ironically, these pay-extra channel launches come as cable, telco and satellite providers are giving away many months of free premium movie channel programming from the likes of HBO and Starz to win new TV subscribers. That may be because such premium channels have become table stakes for TV offerings, leaving operators to find ways to charge for much more targeted content. Indeed, it’s nearly impossible to find a TV provider that offers video on demand that isn’t pushing VoD with even its entry-level TV packages.

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