Video-On-Demand Market Slow to Take Off
Despite heavy promotion by cable providers, video-on-demand services have so far failed to capture much market share, according to a new report from Forrester Research.
The report, Modest Demand For Video On Demand, says 2007 should have been a good year for VOD. After years of slowly building VOD services, cable providers looked poised to capture a substantially large market share with new services such as free hit TV shows,day-and-date release trials, and dramatically expanded inventory.
Cable providers such as HBO even began offering shows “On Demand” for free the week before they premiered. However, Despite the dramatic press releases from players like Comcast that suggest hours of VOD viewing are rising among existing users, the raw number of users rose this year from just 13% to 15% of all households.
The Forrester survey had several key findings:
- VOD occupies only 3% of weekly video minutes viewed.
- VOD users watch nearly five programs per month.
- Free VOD beats paid and subscription VOD.
Furthermore, “The lack of a growth spurt for VOD is troubling when seen next to other video platforms.” A number of formats are providing strong competition for VOD: Web-delivered TV shows, DVRs and Short-form Web content.
The report gives cable providers four major suggestions for improving the market share of VOD:
- Improve navigation.
- Create Web-based discovery tools.
- Conspire against the DVR.
- Jump on the HD bandwagon.
Meanwhile new study of DVR usage carried out for NBC offers some encouragement for broadcasters and advertisers. According to the Wall Street Journal, viewers absorb some ad meessages even when they are zapping through them. “In general, viewers who watched live were much more likely to recall an ad. In the study, 69% of live viewers remembered the ads the next day. But 25% of the viewers who were zapping ads at the fastest available speed also recalled them the next day, according to NBC.”
Part of the reason, it turns out, is that viewers speeding through ads are often paying more attention to the screen than live TV viewers, who listen for clues to turn back to the TV program.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.