On-demand channels: a niche frontier

Television audiences have grown accustomed to on-demand programming, mostly in the form of pay-per-view movies and services like HBO on Demand that cost extra.

For several years, however, many television and technology companies have also been developing free video-on-demand services with all the determination - and uncertain futures - of oil prospectors. Now their free video-on-demand channels are expanding, seeking more viewers and asking advertisers to help pay the way.

Last week, for example, Comcast Cable's 8.5 million digital subscribers started receiving a free on-demand parenting network called Alpha Mom TV. That channel is seeking its first advertisers.

Gemstar-TV Guide International has lined up the Kellogg Company's Cheez-It brand to sponsor this summer's planned debut of TV Guide Spot, which will offer nothing but free on-demand programs about each week's television schedule. The Music Choice network has already run trial campaigns for brands like Diet Sprite Zero amid its free on-demand music videos.

And next month, Rainbow Media plans to start an ad campaign for Mag Rack, a four-year-old channel that offers on-demand programs about everything from weddings to video games. The June/July issue of Details magazine will include a five-page spread promoting a short film exclusive to Mag Rack that integrates two Details advertisers, Bombay Sapphire gin and Jean Paul Da'amage jeans.

"We have grown steadily as video-on-demand has gained distribution," said Daniel Ronayne, senior vice president and general manager of Mag Rack and another on-demand network called Sportskool, both of which are owned by the Rainbow Media unit of Cablevision Systems. "We feel that we are in a position to get out right now and speak with advertisers in a meaningful way."

But all these channels, not to mention their competitors, will need more revenue from advertisers to prove that their business model works. Advertisers in turn may want to see more high-profile content, like hit programs available on demand, before they support the format in a big way.

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