ABC: Give Us Credit For Our Digital Strategy

ABC was the first of the Big Four broadcast networks to put shows online and consistently leads what digital chief Albert Cheng believes is the key measure of online video: The amount of time spent watching its stuff.

Yet because ABC and Disney (DIS) mostly keep their content to their own sites (unlike CBS) and didn’t join Hulu (unlike Fox and NBC), it gets tagged as a digital backwater, or worse — beholden to Apple’s Steve Jobs, Disney’s largest shareholder.

Cheng’s argument, which he made to us in an interview yesterday: ABC has a more nuanced view of the video world than its competitors: It’s happy to distribute its stuff beyond its own site, he says — but on terms that differ from everyone else. “We’ve gotten caught up in this being ‘a closed strategy,’ but what it really is is a difference in how we market our shows and how we monetise,” he said.

The difference: Rather than a cut of ad revenue, ABC pays distribution partners based on the the traffic delivered, which is the terms of its deal with AOL. “Any portal can have access to our content syndication feed and we would be happy to set them up, if they commit to a certain level of performance,” he says.

ABC distributes its content through its proprietary player, which is geo-targeted so shows carry multiple ads from one national advertiser and one local ad, placed by the corresponding local station. If you’re watching “Desperate Housewives” online in Manhattan, you’ll see one ad sold by WABC in New York — whether you’re watching the ad on or AOL. If you’re in Santa Monica, you’ll see one sold by KABC in LA. Like Hulu, you can’t skip the ads.

Like CBS, Cheng says rates for video ads are comparable to TV rates, in excess of $20-per-thousand, but he wouldn’t specify an exact figure. “The CPMs need to be high because the platform delivers more richness and interactivity,” he says.

He says the ad inventory is sold separately from TV, and that ABC’s web video business is already making money. “It’s generating a piece of profit, not an enormous part, but we believe this will become a larger part of the business,” he says.

Cheng’s Rodney Dangerfield complaint: He’s irked by rankings that stress “total videos” served. YouTube (GOOG) dominates this metric, and ABC consistently trails its network competitors here. Not surprisingly, Cheng thinks the number is nearly worthless.

Better, he says, to focus on the amount of time spent watching a site’s videos (’s average = 18.8 minutes), because that represents the opportunity for advertisers to get their message across.

“One video could be 15 minutes long for a network site versus a minute on YouTube,” he says. “The motivation for going to YouTube is to browse and surf and see what’s possible in pop culture. Put an ad in front of them while they’re browsing and its annoying.”

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