By some measures, VOD is doing better. Magna Global has estimated that U.S. homes with VOD, a "category that includes both traditional multichannel VOD offerings and over the top services," will hit 70.1 million homes, about 57 percent of all TV homes at the end of 2016.
But note the conflation of traditional VOD and over the top services and apps. Some of us would not classify over-the-stop streaming as VOD, just as time-shifted viewing on a digital video recorder is not VOD, and Netflix streaming is not VOD.
Still, even availability is not the same thing as "usage." Hundreds of TV channels are available on cable, satellite and telco subscription video services. That doesn't mean those channels are viewed by most people. Much as fixed line voice service is available to most homes, but isn't necessarily purchased by all those homes, so too for-fee or ad-supported VOD is available relatively widely, but isn't used much.
TDG attributes that failure as a reflection of VOD's inadequate advertising support and awkward program guides that limit availability and viewing of ad-supported video-on-demand content. VOD hampered
Some of us might argue that "inattention" not withstanding VOD never has gotten much traction in the U.S. market and that the problem is lack of interest and demand on the part of consumers.
Service provider lack of attention to ad-supported VOD is the problem, TDG argues.
According to Bill Niemeyer, TDG senior analyst, "operators have failed to take advantage of VOD to build subscriber satisfaction, generate ad revenues, and head off competition from over-the-top (OTT) providers like Netflix."
Niemeyer estimates in the fourth quarter 2011, Netflix U.S. subscribers watched 80 percent more streaming video hours than were viewed in the same period on all U.S. PayTV VOD.
Some of us might argue that marginal failures to market and support VOD could be an issue. But there is a reason service providers do not market VOD so intensively. VOD simply does not contribute significant revenue for a service provider.
VOD in recent years has contributed about $2 billion a year worth of revenue for U.S. video entertainment providers. U.S. cable TV companies alone booked about $98 billion in 2011 revenue. That doesn't include the sizable revenue earned by satellite and telco providers as well.
The point is that VOD, as a service, has been a modest success, though it has had three decades to make its case.
Some of us might argue that "inattention" not withstanding VOD never has gotten much traction in the U.S. market and that the problem is lack of interest and demand on the part of consumers.
Service provider lack of attention to ad-supported VOD is the problem, TDG argues.
According to Bill Niemeyer, TDG senior analyst, "operators have failed to take advantage of VOD to build subscriber satisfaction, generate ad revenues, and head off competition from over-the-top (OTT) providers like Netflix."
Niemeyer estimates in the fourth quarter 2011, Netflix U.S. subscribers watched 80 percent more streaming video hours than were viewed in the same period on all U.S. PayTV VOD.
Some of us might argue that marginal failures to market and support VOD could be an issue. But there is a reason service providers do not market VOD so intensively. VOD simply does not contribute significant revenue for a service provider.
VOD in recent years has contributed about $2 billion a year worth of revenue for U.S. video entertainment providers. U.S. cable TV companies alone booked about $98 billion in 2011 revenue. That doesn't include the sizable revenue earned by satellite and telco providers as well.
The point is that VOD, as a service, has been a modest success, though it has had three decades to make its case.
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