Demanded by Viewers, Not Networks
The Wall Street Journal reported on the subject today with the angle that while VOD is most assuredly the next wave of TV, the networks aren't biting with their big popular primetime TV shows. According to David Zaslav, president of the cable division at NBC Universal, it's because VOD doesn't have a promising economic model.
The story didn't go into those details. But that model isn't just about paying a fee, but what to do about advertising. Similar to digital video recorders, networks have the same problem with VOD - viewers can skip commercials.
So the question arises of whether to run commercials in these shows. But if that happens, viewers might just abandon regular network TV overall which isn't good for any network's business.
It's not like TV advertisers are out of this mix. For some time now, advertisers have experimented with putting on their own brand-induced entertainment shows on VOD, such as the one service own by Comcast Corp.
This may not work for advertisers, because cable companies are keeping some key research close to their vests.
Jon Mandel, chairman of media agency MediaCom USA, complained during a session at the National Association of Television Program Executives meeting this week that Comcast won't give up any viewing data concerning existing VOD service. How is a client supposed to decide whether to buy, he asks. Others say privacy issues are a concern for VOD because it can offer actual research viewing data.
Comcast Corp. says its business is growing. Currently, it receives an average of two orders a week for each Comcast customer who has access to on demand. Next year it expects 1 billion orders.
VOD is still a big promise for cable in its efforts to compete against satellite, but until it addresses real advertising and research issues, it is just VOH - video on hold.
WAYNE FRIEDMAN
Wayne Friedman is West Coast Editor of MediaPost.
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