Commentary

VOD Views Grow, Offering Networks Help Fighting DVRs

Bruce Lefkowitz pretty much declared war on a beloved device last month. At an upfront event, he introduced a new FX Now platform, where viewers won’t be able to blitz through ads. And then ...

“The strategy we’ve developed is one designed to obviate DVR usage,” said Lefkowitz, FX’s sales chief.

The FX Now option will make programming available on-demand to pay-TV subscribers the day after a broadcast debut. Content will be available on multiple platforms with the same ad load as FX is aiming to capitalize on an aggregate C3 rating.  

As part of Lefkowitz’s battle, the fast-forward option will be disabled for all FX Now viewing. Other networks are employing the same FF-neutering tactics with traditional video-on-demand (VOD) and, of course, online consumption generally doesn’t allow for ad-skipping.

In a perfect world for networks, it would always be 1998. But with DVRs, networks could do well by encouraging viewers to watch via VOD or online rather than the devices. A hefty, creative campaign urging them not to bother setting the DVR because all the stuff is available easily anyway makes a lot of sense.

If viewers buy in, the FF disablement should boost ratings and revenues. To be sure, viewers are smart and may very well embrace DVRs even more passionately when they use FX Now or brethren and realize they can’t skip the spots.

But there is some evidence that the potential boon from a widespread viewer shift to on-demand consumption is available. Rentrak’s new report that covers traditional free VOD viewing shows the platform is growing swifty.

In 2012, the number of programs watched increased 29%, while total time spent jumped 40%. Broadcast networks benefited more than cable ones with number of their programs watched up 47% and total time spent increasing 60%.

Overall, HD VOD consumption was up 60%-plus.

Also positive, though less so, for networks is 43 million TV homes watched VOD programming on a monthly basis, up 5%.  

Note: it’s likely much of the viewing was not ad-supported. 

Rentrak executive Cathy Hetzel used the numbers to say that significant “ad dollars could be left behind” if ad-supported VOD doesn’t become a greater part of the TV ecosystem.

Besides an opportunity to take advantage of a single C3 rating, networks might gain even more money if robust dynamic ad insertion takes hold, allowing them to sub in more timely messages in content watched after the three days post linear debut.

For now, with fast-forwarding buttons disabled, touting VOD vigorously seems a smart approach for networks. It may not win the anti-DVR war, but could capture some battles.

 

 

 

 

2 comments about "VOD Views Grow, Offering Networks Help Fighting DVRs".
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  1. Chris Monteferrante from AT&T Adworks, April 18, 2013 at 9:17 a.m.

    As much as we (the industry) wants viewers to sit through a full commercial load with the "fast forward" feature disabled on VOD platforms, the reality is they will not. I agree that there is a price to pay by the viewer for VOD access of their favorite programs...cut down the commercial load by at least half and people will use the platform. Declaring war on consumer behaviors and preferences is a recipe for failure.

  2. Dave Hosford from TelAmerica Media, April 18, 2013 at 7:49 p.m.

    Respectfully, the DVR was invented to serve those who had so little time in their busy week that they chose to maximize their free time by watching a program in less time. It works for them. Why should we try to take another minute of the valuable free time they afford us to drive ratings for our programming? Without them, our content is less valuable. By adding commercial time, we would run the risk of alienating viewers that help to establish programs/networks. Do we really want steer them away from the one thing they count on week in and week out? A working mom with 2 kids may not have time to sit through 2 shows in the limited window of personal time available each day because we decided that we could monetize another vehicle to serve a captive audience another ad. We don't really need to take that away from her, do we?

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