• by Jack Loechner , Staff Writer @mp_research, March 21, 2006

VOD and VCR Make Strange Bedfellows

New consumer research from the Leichtman Research Group, finds that nearly three quarters of VOD users who have a DVR from their cable company strongly agree that their cable service is better because they have both Video-on-Demand (VOD) and a Digital Video Recorder (DVR).

Just 15% feel that they don't need a DVR because they have on-demand service, and 19% feel that they don't need on-demand service because they have a DVR.

Nearly two-thirds of these key high-end subscribers are very satisfied with their cable operator, and few report that they are likely to switch providers. While over 14% of cable subscribers in the markets studied say that they are likely to switch from their current cable provider in the next six months, fewer than 6% of digital cable subscribers who have used VOD and have a DVR say that they are likely to switch.

Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.,said "Usage of VOD services continues to grow, with between 55%-83% of digital cable subscribers having used VOD in the four markets that were studied. For consumers (as well as providers), however, it does not come down to an either/or decision for DVR and VOD, but rather how the combination of the two creates the most compelling on-demand offering."

Among VOD users who have a DVR:

• Mean spending on cable TV service is $76.65 per month (43% above average)
• 78% also get high-speed Internet from cable
• Mean annual household income is 42% above average

65% of current digital cable subscribers have used VOD

• There are few differences in overall satisfaction and likelihood to switch between digital cable VOD users and non-users
• However, just 7% of Premium-on-Demand users say that they are likely to switch - compared to 15% of all other digital cable subscribers

Just 16% of current VOD users report that they would be very likely to pay $0.99 to get a primetime program on-demand

For more information about "Consumer Opinions in Four On-Demand Markets," please visit here.