With research showing that consumers prefer to watch on-demand TV shows that are ad-supported against having to pay for them. In response to this data, CBS (CBS-A) has stopped its 99-cent individual pricing per show on its cable video-on-demand offerings and has adopted an ad model on Comcast beginning this fall.
CBS will offer separate advertising for the on-demand shows which will be "CSI: Crime Scene Investigation," "CSI: Miami," "CSI: NY," "Numb3rs," "NCIS," "Survivor," "Jericho" and "Big Brother."
This should work for CBS and Comcast as the majority of cable networks sold out their entire inventory in the upfront this year. Also, as Ad Age reports, CBS has already gotten a taste of the success of ad-supported on-demand shows as it took in between $4 million and $5 million from its March Madness on Demand college basketball.
One of the other benefits to this service, contrary to the CBS Innertube broadband network, is that VOD will include the ability to run things like you do on a VCR; like fast forwarding, rewinding and pausing.
Comcast has had this as part of their overall goal with VOD because it offers a key differentiation between them and their satellite competitors. Comcast believes in it so much that they have guaranteed revenue to CBS, whether an ad is sold or not
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