Sponsored programming is as old as television, while product placement is commonplace today. But now, at least one studio is making a concerted effort to produce such branded entertainment exclusively for digital use.
NBC Universal Digital Studio, a two-year old production unit, is the only such operation funded by a major traditional film and television company. According to Adweek, while the studio has so far produced only two series each year, it plans to increase its production of digital shows—short-form programming and Web series, such as In Gayle We Trust—in the coming year.
How it works: Brands such as Nestea tap NBCU Digital Studio to produce original, scripted programming and agree to an advertising package that may include product placement and other forms of brand promotion.
The result, in this example: a ten-episode Web series, CTRL, which was available on TV via cable, satellite and telcos' video-on-demand platforms, online at NBC.com, USANetwork.com and Hulu.com, and on mobile platforms and gaming consoles.
Additionally, a dedicated website hosts CTRL's episodes plus branded games, photo galleries, character bios and a blog maintained by the lead character. As an additional revenue stream, NBCU may distribute the content to iTunes.
One big advantage for brands is the reasonable production cost. A single episode of a traditional television series could cost millions of dollars to produce, while eight episodes of a digital series produced by NBCU might cost as little as $400,000 to $3 million.
Another example is the partnership between NBCU Digital and U.S. insurer American Family Insurance: In Gayle We Trust, a 10-part comedy series about, naturally, an insurance agent. Telisa Yancy, AFI advertising director, tells Adweek that the show's first season resulted in a 24% increase in "intent to purchase" among consumers considering insurance. The series will start its second season in July.
With this budding opportunity to break away from traditional television entertainment, NBC Universal Digital Studio could benefit from a digital-only market that keeps brands coming back for more.
When NBC's former programming head, Ben Silverman, hangs out his own shingle to produce branded digital programming (as he is doing with Electus, being backed by Barry Diller's IAC), you know this is the next frontier for television programming and advertising.