The Continued, Though Slow-Moving, Promise Of Video On Demand

With traditional TV video-on-demand viewing time climbing significantly, media sellers and buyers can only think: What does this mean in future years for "long-tail"  network brands and media planning?

Rentrak says viewing time of all content -- TV programs and movies -- climbed 40% in 2012 versus the previous year for free-on-demand TV viewing. TV programs themselves witnessed a 29% hike.

Here's the key to this particular kind of time-shifted content: There is usually no fast-forwarding through commercials. That's good news for marketers, even if VOD viewing numbers are still small. VOD viewing is included in Nielsen C3 ratings -- C3 being the first three days when a lot of time-shifted viewing occurs.

The not-so-good-news: DVR and VOD viewing from C4 and C7 is also small. Analysts say it amounts to maybe a 1% to 2% addition for the most high-profile content of a select few networks. But most shows are probably less than 1%.  Some 43 million out of  nearly 120  million TV homes access VOD content each month.  About 60 million homes can access VOD content. Rentrak says VOD penetration is growing slowly --  a 5% rise from 2011 and a 13% increase from 2010.



Still, Rentrak says there was quicker growth for free, ad-supported on-demand programs from the broadcast networks --  a 60% increase in total time spent viewing and a 47% jump in the total number of programs.

The issue concerning media planners: How much real advertising dollars are left behind?

Recently some changes occurred -- including how VOD commercials get inserted and swapped out --  that made it easier for media planners to consider placing messaging in VOD content.

In the absence of real and wide-scale addressable advertising -- as well as the lack of  interactive TV advertising -- VOD seems to have some future. The problem with the VOD promise is always about getting all major TV distributors (cable, satellite and telco) on board -- as well as getting media planners to include VOD in their plans.

Newer VOD platforms -- such as Netflix's subscription video on demand -- can help fuel growth, even if Netflix's content isn't ad-supported. That's because consumers are learning behavior.

With around 50% of homes getting traditional TV VOD, scale continues to be a problem, especially for national advertisers looking to climb aboard. But, versus other new TV platforms, VOD appears to still have some continued promise. Perhaps just a better promise.

1 comment about "The Continued, Though Slow-Moving, Promise Of Video On Demand ".
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  1. Kevin K from Anonymous, April 19, 2013 at 5:37 p.m.

    I believe that in 10 years, or maybe less, VOD will be the way most people will watch TV programming.

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