Who really wins when ads are added to free content?

• December 22, 2007
• James Skemp
• article, Internet

Ars technica has a post, Microsoft patent could force downloaders to view commercials, regarding advertising before the playing and/or downloading of online content.

Microsoft's patent application, titled Enforcing Advertising Playback For Downloaded Media Content, describes systems that are based both on tokens and DRM which would prohibit playing a media file unless its accompanying advertising is viewed. The technology is designed to prohibit fast-forwarding, editing, or otherwise circumventing the advertisements, though it is unclear exactly where the ads would be placed. 

Now I have a couple of experiences with online video, and can therefore give my opinion on this.

Google Video, YouTube, and the like

These are services where the content is from either individuals, or small groups, and is offered for free, for whatever reason. We also see larger groups releasing material for free, either in order to generate buzz, or as a kind gesture.

Video can be either streamed or downloaded.

These sites also support purchasable content.

Netflix

Netflix offers streaming video, as part of their subscriptions. Video cannot be downloaded, and works only a Windows machine, due in no small part to their dependence on Windows and licensing.

Adult Swim and The Daily Show

Adult Swim (Cartoon Network) offers streaming video of this week's shows. Content is not downloadable.

This is true also for The Daily Show's video.

Adverts in each

Netflix, being a pay service, obviously does not add any adverts into their videos, at any place. This makes sense. Why should I have to pay for something, and then watch advertisements on top of that?

Adult Swim segments their videos into a couple of pieces, of reasonable length. Before each clip, there may or may not be an advertisement. (This seems to be more because their software doesn't always play one, or that not enough adverts have been sold.) Adverts cannot be skipped.

The same can be said of The Daily Show, save the show is segmented much more than might be expected. There is (the last time I checked) also no way to move gracefully through each segment of the show, which makes the adverts much more noticeable (in a bad way). (They also had a very small number of ads to choose from - one - which made it even worse. The more you shove a product at me that I don't want, the less I'm ever going to want it.)

For Google Video, I've yet to see an advert. For the most part, videos are very short, so adding an advert may effectively double the viewing time. I've also yet to see an advert on YouTube (but I don't watch it that much).

Common sense vs. marketing

From a common sense perspective, it seems that if I purchase something, I shouldn't have to deal with additional advertising. However, we know that that is not the case. When I purchase something, chances are I'll see marketing on what else I could purchase to supplement my purchase. Or, what other products are made by this company.

However, this also seems to make sense. I've purchased a Playstation 3, and therefore chances are I'll also want to see what else I could buy for it. However, I should be the one that pursues it further. I don't want to be forced to sit through trailers when I buy a movie, but I don't mind them coming up before the movie if I can skip through them.

Where advertising doesn't work is when something other than what you're showing interest in is being marketed to you. If I'm watching a video on scientists talking about global warming, don't show me a commercial for a Hummer.

Of course, how do I know about a product unless I'm told about it? In some cases, it's a good thing when, when I'm looking at one thing, I'm told about another, since I may really 'want' the other thing more, or instead.

Adding adverts to another's free content

So that 'side-note' has suggested that marketing is both good and bad.

Moving back to online video, the question is, what happens if advertising infects each?

If we add adverts to Netflix, and we're unable to skip through them, why am I paying so much for this kind of access?

If we add adverts to Google Video or YouTube, who gets the profits? If I create content and upload it to your site, we both provide something; you provide the bandwidth and hosting, while I provide the content that generates that need. Perhaps also you bring more people to my content.

As I see it, we're already in a cycle, for these sites, to have adverts surrounding content that someone else created and 'freely' 'provided'.

There's a difference, you see, between what The Daily Show, NBC, etcetera do, and what may end up happening to this other content. At this point, individuals are posting content expecting it to be fairly ad-free. Some people, who know how the world really works, realize that adverts may appear on the site, but consider that the way that the site can get back their costs.

Charging the consumer for generating buzz

We also seem to have an issue where, in order to get their content to a larger audience, groups are making their content available online, but then throwing adverts on top of the content, or charging more for the 'convience.' I can think of one news site that did this for the longest time.

However, aren't we really seeing the consumer getting charged for generating buzz for the group?

How about an online content site? We'll offer this service where you can post your content, for free. We need to cover the costs of running the site, however, so we'll need to put advertising around your content. Now we need to show this ad before they can even see your content. Or, now we need to charge a membership price.

As the content creator, I may not be making any money. Rather, I may just be getting the privilege of using your service.