Friday, October 14, 2005

Video on Demand (VOD) News

Video on Demand (VOD) News (TVB October 2005 Report)

US Penetration Estimates:


  • Nielsen estimates 21 million VOD HHs today, expected to reach 30 million next year.

  • Nielsen found that 42% of VOD-accessible homes in the NPM sample watched VOD for at least 60 minutes during at least one week in April-May 2005. The current prime time rating is about 0.15%.

  • MAGNA Global’s On-Demand Quarterly 1st quarter 2005 review estimates 24.5 million VOD-enabled subscribers in 2005 and projects 66 million by 2010.

  • Kagan Research estimates that by end of 2005, 23.9 million U.S. homes will have access to VOD from their local cable operator.

  • Edison Media Research & Arbitron’s Internet & Multimedia 2005 study showed 10% of the U.S. population 12+ watched VOD last month.

Factors Affecting Development of VOD


  • Nielsen’s plans for measuring VOD in 2006 are favorable for establishing pricing for ad-supported VOD content.

  • Disney plans to pursue distribution of “A” grade ABC VOD product with cable operators.

  • MSOs and programmers don’t agree on pricing models, with programmers wanting revenue based on the incremental value of content for cable operators, and MSOs believing that they’ve paid for content once and shouldn’t have to pay again for time-shifted delivery.

  • Growth of direct download (Internet-based video) and P2P-based (peer-to-peer) file-sharing of television programming could limit the appeal of VOD because they compete directly with VOD services.
    Source: MAGNA Global On-Demand Quarterly, June 2005


VOD Research

CBS conducted research on potential VOD usage with its Entertainment Panel (sample of 2457) in December 2004.

  • 44% had access to VOD product.*

  • Among those having VOD access, 21% had ordered something in the past month.*

  • With the choice of ordering VOD for $1 with the ability to fast forward through ads or $.50 without that ability, 62% chose the $1 capability and 38% chose the $.50 alternative.*

  • Among CBS’ TV City New Technology Focus Groups (18 groups in Dec. 2004), 95% found at least one program that they would consider purchasing, and the average number of programs selected was 7.5 programs.*

  • PricewaterhouseCoopers projects 15 million cable subscribers will spend $1.35 billion on pay products this year.**

  • The average share of cable subscribers using VOD at any one time ranges from 6% to 10% – and that is expected to rise to 20% as VOD gains popularity.**

  • Top 10 to 15 titles on most systems account for 50% of all VOD requests.**

  • Movement is toward peer-to-peer (P2P) networks, which allow people to play games with each other or send videos or phone calls.**
    Sources: * CBS Research, ** Broadcasting & Cable 03/28/05

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