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Another Opening, Another show

Another Opening, Another show

Yet another esoteric opportunity could be pay-per-view as a medium in which advertising may encroach. And it's a growing market. A Strategy Analytics study predicts that half of U.S. homes will be regular VOD (video on demand) users by 2008, spending $26 billion on VOD services over the next seven years. Estimating that more than 8 million U.S. homes are currently passed by VOD-capable cable networks, this number will rise to nearly 50 million by the end of 2003. Activated VOD homes (those with set-top boxes loaded with VOD software) currently number around two million, and this will rise to 7.6 million by end 2002. Strategy Analytics estimates that only 2.4 million homes will actively use VOD this year, or fewer than 10 percent of those passed.

Findings compiled in a recent study, VOD and SVOD: Consumer Perceptions and Market Opportunities, reveal how the technologies interplay with various aspects of the cable, television, and entertainment industries. The Leichtman Research Group survey of 1,800 households throughout the U.S., as reported by Robyn Greenspan, shows that 42 percent indicated that they would pay for SVOD of premium movie services.

The study identifies the likely "early adopters" of SVOD and VOD services. In a split sample:
- 56 percent of current premium movie subscribers report that they are likely to pay $4.95 per month for SVOD.
- 38 percent are likely to pay $9. 95 per month for SVOD.
- 65 percent of households that spend more than $15 per month on video and DVD rentals say that they would order pay-per- view movies more frequently if they were available on-demand.
- Households with VOD capability order movies over twice as often as the typical digital cable household currently orders pay-per-view movies.

"Video-on-demand is not a new concept, but converging factors now make a widespread deployment of VOD more likely," said Bruce Leichtman, president of Leichtman Research Group, Inc. "SVOD, and the availability of other programs on-demand beyond just hit movies, changes the dynamics and economics of delivering Video-on-Demand."

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