There's A Lot To See On VOD

I’m not sure when it happened, but some time when I wasn’t paying attention, video on demand (VOD) emerged as a legitimate option for timeshifting.  I’d been using VOD to watch the occasional pay-per-view movie when I was feeling flush, but given how much media attention is paid to the other timeshifting platforms, it didn’t occur to me until very recently to tune to VOD for regular free TV.

Of course, the best way to timeshift remains the DVR, where you can record anything and play it back as soon as you want (assuming you remember to record the program in the first place).  Then there’s online timeshifting -- watching shows over the Internet on network websites, Hulu or Apps -- which can be a convenient option if you like watching television on computers, laptops and tablets.  And of course there’s Netflix and other services that can stream directly to the TV but that don’t have a lot of content.

Then there’s VOD -- the original timeshifting option, which seems to be making a renewed run at relevancy.  I’m in a Cablevision home and was surprised to discover that I have access to a lot of free VOD I would actually watch.  Some of the networks that offer recent programming are:  ABC, Fox, NBC, AMC , Comedy Central , MTV, and TBS.  Which means that some of my favorite shows are available: “Glee,” “The New Girl,” “The Office,” Mad Men, The Daily Show, “The Jersey Shore” and “Conan.”

The advantages of VOD timeshifting are obvious.   Unlike DVR, for which there is an extra fee (and which is subsequently available in fewer than half of TV homes) any TV with a cable box can get VOD for no extra charge, which makes it available in more than 100 million homes.  And unlike computer-based timeshifting, you can watch VOD on your regular television, big screen and all, in the comfort of your living room.

Where VOD comes up short is in the lack of a consistent go-to-market strategy.  VOD is a continuously changing service, with advertisers, networks and advertisers testing a variety of business models.  Consequently, a few shows are available immediately after airing, while others aren’t on for three or four days after airing -- or even for several weeks. And depending on the MSO, many shows and major networks aren’t available at all. To make it even more complicated, some VOD offerings have no ads, some have the same ads they appeared with on TV, and others have different ad loads altogether.  Further some have ads you can skip through, while others don’t allow fast-forwarding.

This free-for-all means that consumers who want to watch TV on VOD have to look at each available network by each available show to see when and how they can watch their favorite programs.  That can be a lot of work.

The renewed interest in VOD comes along at a time when the concept of appointment television is evolving. It used to be that viewers would make sure they were on the couch when their favorite programs aired, but because of DVRs, Hulu and Netflix, these same viewers now expect to watch a program on their own schedule.  Which is why the time is ripe for a rebirth of VOD, assuming enough content is offered on a regular basis.

It seems to me that the TV industry is missing the boat by not including more shows on VOD, not making them available the day after they air, and not promoting them more.  If I ran a network, I would rather have my show seen on VOD with the regular commercials intact than on Hulu, where it would have a different commercial run, or even on DVR, where viewers can fast-forward through the ads.

The reason VOD makes good business sense is that if a program is on VOD with the original commercials and is seen within three days of the original broadcast, it will receive credit under Nielsen’s C3 ratings.   C3, of course, is a measure of how many people watch a show’s commercials and is the primary metric networks use to get compensated by advertisers.  

But hardly any networks or MSOs use VOD this way. Instead, they seem to go out of their way to avoid getting C3 credit by not making their shows available for at least three or four days after they air -- and then in many cases stripping out the commercials or substituting different ads.

For its part, Nielsen has proposed new rules that would make VOD an even more attractive option for content providers.  In a recent series of client meetings, Nielsen laid out an “On Demand C3” option, under which C3 credit would be given to commercials viewed in any program in a particular series – as long as those ads were the same ones that were shown in the most recent episode of the series.  In other words, VOD viewing of an episode of “Glee” that aired in September could receive C3 credit if it contained the same commercial load as the episode of “Glee” that most recently aired.

This new measurement may or may not jumpstart VOD as a major timeshifting platform, but at the very least it would make abundantly clear that the crucial TV measurement is not how many people watch a show, which has been the case since the dawn of television -- but how many people watch the commercials.  This has been more or less the case since Nielsen introduced C3 ratings several years ago, but until now, the commercial had to be tied to the show. On Demand C3 would untether commercial ratings from program ratings once and for all. Once this principle is established, the door could be opened for even more dramatic changes in the future.

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