Brave New Mouse

There wasn't time for focus groups. "We went on gut," Rapo says. Their gut told them to include three 30-second spots from a single advertiser--fewer ads overall but a more concentrated message, with the sponsor's logo at the top of the screen throughout the show.

The video-streaming platform "has exceeded our expectations in every way," says one advertiser. "We're able to surround an individual."

That reflects Cheng's (and Sweeney's) sensibility, a marriage of creativity and business realities. TV, even online TV, is an ad-supported medium. So Cheng invited advertisers to create ads unique to the new streaming format, with interactive elements like links and games. The slots for the May and June test sold out in only five days.

The Florida Department of Citrus was one of the original 10 advertisers, and has been one ever since. According to ABC research, 85% of the online viewers surveyed during the trial run could recall the advertiser--off the charts compared to TV watchers. Cheryl Huckabay, the interactive media director at Click Here, the agency that developed the citrus spots, credits that phenomenon to having a sole sponsor for an entire episode. Such exclusivity is too pricey on TV, but online, she says, "We're able to surround an individual."

Click Here put together a trio of ads for the trial--a conventional TV spot, a juice maze, and a "Flu or False" quiz about the health benefits of orange juice. Each ad contained a link to the citrus department's Web site, which viewers clicked on more often from the later spots. The streaming platform, says Huckabay, has "exceeded our expectations in every way."

Cheng is conscious of the need to appease stakeholders who fear that disruptive technology could threaten their business--including the local affiliates that air and promote network shows. If consumers migrate online, the thinking goes, the local TV audience shrinks, followed by ad rates and revenue. So Rapo's team incorporated two special features for affiliates. One allows them to incorporate the broadband player into their sites; the other enables them to sell a fourth ad spot to a local advertiser.

The broadband player, which officially launched on abc.com last fall and is now available on the ABC Family and Disney Channel sites, has changed the way executives think about their shows. Fans stop Lost creator J.J. Abrams to tell him how much they enjoy the show--online. For Rapo, the most telling sign that the new platform has arrived are the calls from TV executives who want to know what she can do for their shows online.

The Emmy didn't hurt, either. In January, the streaming player nabbed a statuette for technical innovation. "We pass it around like the Stanley Cup," Rapo says. "It's across the street with our technology team because they're recruiting this week."

Afternoons in Oakdale

Actually, the award came with two Emmy statuettes. The second towers over action figures from Lost atop Cheng's bookshelf; TV's big prize is watching over a guy who was practically raised on TV.

When Cheng's parents moved to Hawaii from Taiwan, the TV in the family room was more than a source of entertainment. His mother learned much of her English from TV, and the kids were expected to do the same. Cheng figures he spent six hours a day on the plaid couch in front of the tube, watching Green Acres before school and As the World Turns with his mother after school, followed by The Electric Company and Happy Days. How much faith did his parents put in TV? "They let me watch Three's Company," he says, "as a kid."

That history shapes how he envisions TV for the digital age. He understands the emotional connection we have with TV, how we feel for the characters on-screen. He remembers the afternoons that he and his mother spent in Oakdale, the fictional town on As the World Turns.

That's the idea behind one recent project. For the March finale of Wildfire, the ABC Family horse-racing drama, the network offered viewers the chance to host online viewing parties. Fans went to the show's site, requested a virtual room, and invited up to 10 friends to watch the episode simultaneously wherever they were logged in. They could decide when to start the show and how to watch, chatting among themselves online, even pausing and rewinding the action.

The nearly 300 "rooms" that fans created added a new dimension to social networking, a top priority for Cheng's team. Still, he says, parties for Lost and other shows hinge on a critical question: "What's the financial model?"