New Balance Buys Cable-TV Stake

[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant@wsj.com and Suzanne Vranica ]
Why buy ad time on a show when you can own the network? New Balance will join workout guru Jake Steinfeld, Time Warner and Comcast in forming exercisetv, an on-demand network that will be available on both operators' cable systems. The deal marks one of the deepest commitments an advertiser has made to on-demand, a relatively new cable service that enables viewers to watch programs whenever they want simply by pressing a button on their remote control. New Balance won't be running conventional 30-second ads on exercisetv because on-demand services allow viewers to fast forward through both the programs and the commercials. Instead, New Balance will promote its products by getting many of the video participants to wear the company's shoes and clothing. New Balance also will sponsor graphic overlays that will run during the videos, giving viewers advice on subjects like the best way to warm up for a workout. Cable companies first began offering video-on-demand over five years ago, but advertisers have been wary about the medium until recently. In the early years, many cable subscribers couldn't get the service and many who could didn't know they had it because operators were slow to market on-demand. Some cable companies also were slow to give advertisers the detailed viewing statistics they wanted. But on-demand availability and usage has greatly increased. About 45% of cable subscribers pay about $15 a month extra for a digital tier, which is needed for on-demand. While viewers usually have to pay to watch recent movies on-demand, companies like Comcast and Time Warner have greatly increased the amount of free content on their services. More than 12 million homes use on-demand more than once a month and that figure should rise to 30 million by the end of 2009.
http://online.wsj.com/article/SB113755121068749292.html?mod=todays_us_marketplace
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http://www.nytimes.com/2006/01/18/business/media/18comcast.html?pagewanted=all