It's All About the Content

Only three things matter where it comes to video on demand: content, content and content. No matter what anybody thinks today, if popular content is accessible on a VOD basis, and is priced and packaged in ways consumers find fair, VOD takes off.

In some ways, digital video recorders provide something of a precursor. Time shifting is a form of VOD. And there's no question but that prime time and scheduled TV are losing their impact as consumers create their own entertainment lineups.

Why is time shifting more popular than VOD? For the same reason any form of media consumption is popular: people easily can get the content they want. Today, there's a fair amount of free VOD content, such as karaoke, music videos and programs for children.

The reason time-shifted multi-channel video content gets higher viewership is that viewers think "that's the good stuff."

eMarketer estimates that VOD is available in one third of TV households today, and will reach over 60 percent of households by 2012. The issue is how much "good" content will be available that way, as well as over the top on the Internet.

ChoiceStream data from December 2007 shows there would be greater viewership of VOD if there were "more content of interest." And pay little attention to what consumers say they will do. Even if they say they aren't much interested in VOD, that's just because the available content is not what they really want.