NBC Broadcasts TV shows online in 2006

September 13, 2006 NBC announces they will show all of their shows online for free. This is great news for people who can't catch their shows during their regular air time or would like to show one of their favorite episodes to a friend.

NBC has been around for years, and was one of the original radio and television broadcasters. They were founded in 1926 as a radio station and started to grow in popularity with their famous serial program Amos n Andy. In 1941 NBC launched their first television program.

NBC headquarters in New York.

Since then NBC has held one of the top spots in television with reach to 98.6% of households in the country. They have exclusive deals with the NFL for the Super Bowl broadcast, Olympic broadcasting and almost all of the major golf tournaments.

In the 2005-06 season, NBC had their lowest ratings in almost three decades. So at the beginning of the 2006 season NBC decided to broadcast their entire fall line-up from the NBC website. While it may seem crazy to give away your products for free, NBC was still able to make advertising profit. NBC's online shows include a 30 second advertisement that plays right before the show, and often one that plays in the middle of the show.

The message displayed on nbc.com during the commercial breaks

Since then, TV shows have begun to broadcast their shows online. Stations such as MTV, CNN, FOX and the BBC use the same format for commercials. What makes these commercials and this form of advertising groundbreaking is the fact that people who want to watch the show are basically forced to watch the commercials. Although there are not nearly as many commercials as on TV, the one or two that are showed online cannot be skipped. Additionally, there are banner ads on either the top or the side of the page that will remain constant throughout the show. NBC uses some of the banner space to promote their other online videos as well. This may be because they cannot find advertisers to buy ad space from them, a recent problem for TV station websites.

"The networks and distributors putting TV online are facing some tough economics. Even if they're selling ads at a healthy $35 to $50 cost per thousand, there just aren't enough of them to pay the bills." (Learnmonth)

One of the banner ads for NBC's healthvideo.com

"Distributors make just pennies streaming a full-length episode of, say, 'The Office,' which is generally not enough to cover bandwidth, hosting and technology costs. Those costs triple for video shown in high definition." (Learnmonth)

NBC Executive Ben Silverman is the executive producer of the hit series "The Office"

Because of these high costs, we can expect more advertisements during online TV shows to help pay for the costs of high bandwidth and production. What started as a simple way to get more attention and views is growing in to a second form of television, with just as much, if not more, advertising.  We can expect to see the form, type, and extent of online advertising change greatly within the next few years. NBC has even created a new website to generate viewers and promote advertisements. Hulu.com is growing in popularity as a place to watch TV and movies online.

"Advertisers are expected to spend about $505 million on online-video advertising in 2008, according to eMarketer, a 55.9% jump from the $324 million they spent in 2007. " (Steinberg).

            As prices and amount of advertising continue to increase, we can look back to the year 2006 to get an understanding of where the boom may have started. While some statistics may vary according to the source, they all have one thing in common, and that is a drastic increase. The graph displayed below shows how advertising sales from 2006 set new records and paved the way for future years. One may attribute this increase in growth to the addition of video commercials to online TV broadcasts of television shows.

Expenditure on online advertising in the U.S. during the years 1998-2007

The technology being used to broadcast TV shows however, is not without issues or problems. Many times the shows or videos will lag or skip or the sound will not match the video. An even bigger problem is that the advertisement will play properly, and then something will happen and the show itself will not play. While I was doing research for this paper I went to the NBC website to watch an episode of 30 Rock. Before the episode started there was an ad for the new movie Mall Cop. There was also a banner ad for the same movie at the top of the site. After the commercial ended the screen went blank and my web browser crashed. I saw the commercial and the banner ad, but did not end up watching the show I came to watch. This can be frustrating.

Sources

(2009 January, 11) NBC. Retrieved January 11, 2009, from Wikipedia Web site

http://en.wikipedia.org/wiki/Nbc

Dirska, J. (2008). Advertising on the internet = out strategy. Retrieved January 11, 2009

from Zyski web site: www.zyski.net

Kirkpatrick, M (2006, September 13). NBC to put new primetime shows online for free.

Retrieved January 5, 2009, from Techcrunch Web site: http://www.techcrunch.com/2006/09/13/nbc-to-put -primetime-online-for-free/

Learmonth, M. (2008). Distributors, networks push for more ads in TV shows online.

Advertising Age. 79(37) 3-41. Retrieved January 10, 2009 from EBSCOhost database.

NBC universal (2008). Company Overview. Retrieved January 10, 2009 from NBC

Universal web site

http://www.nbcuni.com/About_NBC_Universal/Company_Overview/overview02

.shtml

Steinberg, B. (2008). It surely isn't lost, but online video finds ad niche. Advertising Age.

79(38). Retrieved from EBSCOhost database.