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Video on Demand
Summary
All you need to know about VoD on just one page, covering definitions, impact on advertising and the current and future market.
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What Is It?
Video on Demand (VoD) systems allow users to select and watch video and clip content over a network as part of an interactive television system. VoD systems either “stream” content, allowing viewing in real time, or “download” it in which the program is brought in its entirety to a set-top box before viewing starts. The majority of VoD systems allow users to buy or select a film or television programme which then begins to play on the television set almost instantaneously.
Current Market
Video on Demand remains a relatively small market in the UK, being led by the likes of Virgin Media which now delivers on-demand programming to 53% of its digital TV households. Virgin Media is planning a major push to encourage the half of its customers who have yet to try its VoD services to do so.
Established methods of delivery, such as pay-per-view for sports and near-video-on-demand (NVoD) for staggered film screenings via digital cable and DTH, will continue to dominate the on-demand sector over the next few years. Thereafter, true VoD, whereby subscribers can purchase programmes when they want, will come more to the fore.
According to Forrester, cable operators are failing to make Video on Demand an enticing proposition for consumers. Despite heavy promotion, Forrester found that users of VoD increased from only 13% to 15% of all US households in 2007.
In addition, the study found that VoD occupies just 3% of weekly minutes viewed, and users watch about five shows per month.Web-delivered TV shows, DVRs and short-form Web content are all providing stiff competition to VoD. Forrester has suggested that improving navigation, offering Web-based delivery tools and stepping up to HD could help fend off the competition.
Impact On Advertising
By 2011, nearly 59% of US TV households will have VoD capabilities, which can be used to avoid advertising. However, eMarketer says talk of TV’s short-term demise is premature, yet it is equally shortsighted to think that the traditional TV model will not change significantly over the next decade. TV advertising dollars will inevitably shift to alternative channels. Online advertising is likely to be the major beneficiary of this redistribution.
JupiterResearch claims advertisers should treat videos as content rather than simply ads – producing creative that entertains consumers and making it available on different video sites and for download to different devices. By leveraging users’ desire to consume and share video content when and where they choose, advertisers can convey their brand messages more effectively than ever before.
Going Forward
Readily available consumer electronics equipment with broadband IP connections, the growing breadth of film content and the rising mobile phone market are all anticipated to contribute to the rapid acceptance of VoD. Cable will represent the largest market for VoD and, in light of the competition, cable carriers have been forced to become more aggressive with their VoD advancements in a bid to maintain their subscriber base.
More than 900 million homes worldwide will have access to true Video on Demand or NVoD by 2012, according to Informa’s “TV & PVRs” report. Informa said that this was equivalent to 78% of the world’s TV households. Revenue from the services is predicted to exceed $10 billion in 2012.
Informa forecasts that North America and Europe will account for a combined 83% of global on-demand revenues by 2012, with North America accounting for nearly one-half of the world’s VoD revenues. While true VoD operators still use a free-content model to promote high customer awareness of the technology, there are now signs that these services are successfully converting users into revenue-generators, often at the expense of NVoD services, which are either being phased out, or reduced in size. In Europe, the UK is predicted to be the on-demand leader, generating $677 million in 2012, with France and Germany in second and third places.
By 2014, Magna expects true VoD to have reached 67.2 million US households (56% of TV households). This compares with 41.7 million US VoD households (37% of total TV households) at the end of 2008.
Magna claims while its forecasts are similar in comparison to prior forecasts, they now incorporate less aggressive assumptions about the pace with which the cable industry will forcibly migrate entire footprints of set-top boxes to digital (the pre-requisite for providing access to VOD) between now and 2014.
Video on Demand (VoD) systems allow users to select and watch video and clip content over a network as part of an interactive television system. VoD systems either “stream” content, allowing viewing in real time, or “download” it in which the program is brought in its entirety to a set-top box before viewing starts. The majority of VoD systems allow users to buy or select a film or television programme which then begins to play on the television set almost instantaneously.
Current Market
Video on Demand remains a relatively small market in the UK, being led by the likes of Virgin Media which now delivers on-demand programming to 53% of its digital TV households. Virgin Media is planning a major push to encourage the half of its customers who have yet to try its VoD services to do so.
Established methods of delivery, such as pay-per-view for sports and near-video-on-demand (NVoD) for staggered film screenings via digital cable and DTH, will continue to dominate the on-demand sector over the next few years. Thereafter, true VoD, whereby subscribers can purchase programmes when they want, will come more to the fore.
According to Forrester, cable operators are failing to make Video on Demand an enticing proposition for consumers. Despite heavy promotion, Forrester found that users of VoD increased from only 13% to 15% of all US households in 2007.
In addition, the study found that VoD occupies just 3% of weekly minutes viewed, and users watch about five shows per month.Web-delivered TV shows, DVRs and short-form Web content are all providing stiff competition to VoD. Forrester has suggested that improving navigation, offering Web-based delivery tools and stepping up to HD could help fend off the competition.
Impact On Advertising
By 2011, nearly 59% of US TV households will have VoD capabilities, which can be used to avoid advertising. However, eMarketer says talk of TV’s short-term demise is premature, yet it is equally shortsighted to think that the traditional TV model will not change significantly over the next decade. TV advertising dollars will inevitably shift to alternative channels. Online advertising is likely to be the major beneficiary of this redistribution.
JupiterResearch claims advertisers should treat videos as content rather than simply ads – producing creative that entertains consumers and making it available on different video sites and for download to different devices. By leveraging users’ desire to consume and share video content when and where they choose, advertisers can convey their brand messages more effectively than ever before.
Going Forward
Readily available consumer electronics equipment with broadband IP connections, the growing breadth of film content and the rising mobile phone market are all anticipated to contribute to the rapid acceptance of VoD. Cable will represent the largest market for VoD and, in light of the competition, cable carriers have been forced to become more aggressive with their VoD advancements in a bid to maintain their subscriber base.
More than 900 million homes worldwide will have access to true Video on Demand or NVoD by 2012, according to Informa’s “TV & PVRs” report. Informa said that this was equivalent to 78% of the world’s TV households. Revenue from the services is predicted to exceed $10 billion in 2012.
Informa forecasts that North America and Europe will account for a combined 83% of global on-demand revenues by 2012, with North America accounting for nearly one-half of the world’s VoD revenues. While true VoD operators still use a free-content model to promote high customer awareness of the technology, there are now signs that these services are successfully converting users into revenue-generators, often at the expense of NVoD services, which are either being phased out, or reduced in size. In Europe, the UK is predicted to be the on-demand leader, generating $677 million in 2012, with France and Germany in second and third places.
By 2014, Magna expects true VoD to have reached 67.2 million US households (56% of TV households). This compares with 41.7 million US VoD households (37% of total TV households) at the end of 2008.
Magna claims while its forecasts are similar in comparison to prior forecasts, they now incorporate less aggressive assumptions about the pace with which the cable industry will forcibly migrate entire footprints of set-top boxes to digital (the pre-requisite for providing access to VOD) between now and 2014.