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VOD - the big winner, says research company
By Jon Newton, p2pnet.net
(more articles from this author)
2002-01-03
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Music Industry News - as it happens
Source: Jupiter/Mi2N - December 20, 2001

Investors looking to turn a profit from video rentals or box office audiences should think again, says Jupiter Media Metrix, which earns its money, "in Internet and new technology analysis and measurement". Instead, the bulk of revenues for the US video-on-demand (VOD) market will come from the pay-per-view (PPV), the company says in its first VOD forecast.

The VOD market for movies will grow to $641.9 million by 2006, states JMM, going on, "To capitalize on the potential of this market, Jupiter analysts advise studios to work directly with cable and satellite operators as well as with potential content distributors such as iNDemand, Starz Encore and Intertainer.

Company analyst Lydia Loizides believes, "The greatest value lies in shifting the pay-per-view audience to VOD and generating incremental revenues. Studios, operators, cable networks and the rental market must prepare to counter the effects, both positive and negative, of VOD on their businesses. Failure to do this will result in another blow to the advancement of interactive television."

Compared with premium cable, VCR's enjoy a three-to-one penetration advantage over advanced cable products, says Jupiter, and when it asked consumers whether or not they expected to purchase or upgrade their cable product, "only nine percent said that they were likely to do so over the next year," Jupiter said. "Eight percent said that they would upgrade or buy a new VCR and 16 percent said the same of a DVD player.

It doubts that the PC will be a hub for VOD services and content, the company said, stating, "When asked about movie-related activities online, only 11 percent of consumers said that they were interested in viewing movies online. Thirty-one percent of respondents said that the Internet was too slow to allow them to watch video. Jupiter analysts assert that direct-to-consumer VOD strategies that focus on delivering movies to a PC are destined to fizzle out before they begin."

But, Loizides added, "There is opportunity for content owners to create a new, incremental VOD channel around the pay-per-view and rental window while off-loading the customer-acquisition and capital-investment costs onto the operator. Studios should directly cut deals with operators and other distribution partners, such as HBO and Blockbuster, and become their own distributors. Operators must prepare to handle the impact that VOD will have on customer service - from call-center increases due to service outages to billing, purchases and maintenance," said.

Related News from Mi2N:
» Movies-On-Demand Will Threaten Pay-Per-View Services, Not Video Rental Or Box Office Businesses


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