VOD: A Marketing Bene'

by , Jan 10, 2014, 6:15 AM
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A new Nielsen study says that as VOD continues to take an increasing slice of the TV pie, marketers can take advantage of viewers’ growing taste for this menu-driven content. The study reports that distributing popular entertainment programs as on-demand choices can have a positive impact on ratings contribution, and possibly even recapture certain demographic groups that were trending in other directions.  

The VOD phenomenon, bolstered by subscription VOD services such as Netflix, which has a 29% penetration rate in U.S. TV homes, is helping consumers to embrace accessing content through a selection menu as opposed to simply channel surfing.

At least some of the credit for this viewing trend should be attributed to the cable operators and their content deals, which have led to increasingly stocked VOD libraries, says the report.

Netflix Home Video Consumption (Percentage of average minutes per person per day, by viewing source in homes with internet access; September 2013)

Viewing Source Video

Netflix Homes

Non-Netflix Homes

Live TV

69.1%

80.5%

DVD

4.1

2.4

DVR

10.4

9.2

Video game console

8.3

2.6

Other

5.8

4.7

Source: Nielsen NPower, December 2013

While traditional set-top-box VOD has become an increasingly important option for content owners, cable companies and consumers, it’s also an opportunity for marketers. Taking recently telecast programs and making them available via an on-demand menu with all national ads included (Recently Telecast VOD) could appeal to advertisers. On-demand users actually watch longer and tend to watch more of the commercials shown with their programs. While research is still ongoing, a 30-minute program that was studied found that on-demand users watched an average of 28 minutes, compared with digital video recorder (DVR) users’ 23 minutes and live viewers’ 20 minutes.

On-demand viewers indexed highest on commercial viewing. Despite initial predictions that disabling fast-forwarding could dissuade viewers from VOD, consumers opt for premium, primetime content when they want it, in exchange for commercial viewing, says the report.

The rise of VOD could affect DVR usage, which has seen steady gains in time spent over the last half-decade. For the programs analyzed, 55% of non-live commercial viewing came from VOD for persons 18-24 when compared to DVR contribution. As expanded libraries of cloud-based VOD, coupled with improved interfaces continue to gain industry momentum, this could be a technological harbinger that on-demand is in prime position to change viewers’ consumption habits.

Video on Demand Total Viewing vs. Non-live Viewing (For A New Action Show Among People 18-24 Years Old)

VOD Viewing

Total Program

Commercial Minutes

Percent of Total viewing

20%

25%

Percent of Non-live viewing

38%

55%

Source: Nielsen NPower, December 2013

For more information from Nielsen, please visit here.

 

2 comments on "VOD: A Marketing Bene'".

  1. Edmund Singleton from Winstion Communications
    commented on: January 10, 2014 at 6:40 a.m.
    I have been a subscriber to DirecTV/HBO for years but only recently started using the VOD option to binge view programs, with special thanks to Netflix I guess...
  2. Doug Garnett from Atomic Direct
    commented on: January 10, 2014 at 11:26 a.m.
    Interesting data. What's entirely missing is a sense of whether this percentage shift is due to shifted hours withing the prior TV hours or due to adding new hours consuming TV content. That's extremely important. There have been studies showing that much of the new video option consumption adds on to existing time without taking away from it. But the last study I saw was a few years old. My guess is that there is some of each - watching more because of Netflix but also changing some TV hours into VOD hours.

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