Making Ad-Supported VOD Work
Summary
This report will review:
- The current level of VOD use by cable and telco IPTV subscribers;
- How advertising-supported broadcast and cable network programming is significantly underrepresented in VOD viewing;
- Why networks and advertisers consider VOD an undesirable advertising platform, including opinions from key industry participants;
- A quantitative look at how free ad-supported VOD could quickly and dramatically grow if operators act to make video-on-demand a better advertising platform;
- The solutions to making VOD effective for advertising supported content (both technology and business issues).
Table of Contents
Definition of Key Terms
Key Findings
1 Introduction
2 The Current State of PayTV Cable and Telco IPTV VOD
2.1 U.S. VOD Use in Context
2.1.1 Cable and Telco IPTV VOD Compared to All TV Viewing
2.1.2 How Big Is VOD Viewing Compared to DVR Use?
2.1.3 Netflix Viewing Leaving Incumbent VOD Behind
2.2 An Example of VOD Success – HBO’s Entourage
2.3 Why VOD Use in the U.S. Remains Small
2.3.1 FVOD Viewing is Underrepresented
2.3.2 FVOD Considered an Undesirable Ad Platform by Networks and Advertisers
3 How Ad-Supported VOD Could Quickly Increase Use and Market Share
3.1 Case #1 – Ad-Supported VOD Viewing Achieves the Same Share of VOD Viewing as Ad-Supported TV
3.2 Case #2 – Ad-Supported VOD Viewing Reaches 25% of All TV Viewing in VOD-Capable Homes
4 Potential Value of VOD Advertising
4.1 VOD Ad Revenue Growth Using Case Study 1 and 2
4.2 Are VOD Ad Revenues Cannibalistic or Additive?
5 Making VOD Effective for Advertising-Supported Content
5.1 Dynamic Ad Insertion
5.2 Measurement
5.3 Workflow/Management Systems
5.4 Standards
5.5 Program Guides
5.6 Marketing
5.7 Business Issues for VOD Advertising – Inventory Splits, Operator Fees
5.8 Advanced TV Ads via VOD – Addressable Advertising and Interactivity
6 Final Thoughts
Endnotes
List of Exhibits
Exhibit 1 – 2010 VOD Viewing Hours by Category
Exhibit 2 – VOD Viewing vs. TV Viewing in General
Exhibit 3 – Estimate of U.S. Cable/Telco VOD Capable Households (Average During 2010)
Exhibit 4 – VOD Viewing vs. All US TV Viewing in VOD Capable HHs – 2010
Exhibit 5 – Comcast Average VOD View-per-Month per HH, 2004-2011
Exhibit 6 – Annual VOD and DVR Use Compared, 2009-2010
Exhibit 7 – Comparison of VOD and DVR Viewing, 2009-2010
Exhibit 8 – HBO “Entourage” 2010 VOD Viewing vs. Linear/DVR
Exhibit 9 – Comparison of “Entourage” and all VOD Viewing Share
Exhibit 10 – VOD Share by Category, 2010
Exhibit 11 – All TV Viewing by Source as a Percent of Audience, 2009/2010
Exhibit 12 – 2009/2010 Viewing by All TV Category
Exhibit 13 – Comparison of 2010 TV Viewing and VOD Viewing by Category
Exhibit 14 – HBO Go Home Screen
Exhibit 15 – VOD Case #1: Category Share among all TV Viewing
Exhibit 16 – VOD Case #1 – Category Share Input Data and End-Case Results
Exhibit 17 – VOD Case #1: SVOD/TVOD Hold Constant, FVOD Share Varies
Exhibit 18 – Estimate of Free On Demand share of VOD Capable Household All TV Viewing in 2010
Exhibit 19 – VOD Case #2: Vary VOD’s Share of All TV Viewing of Free Ad Supported Programming in VOD Capable Households
Exhibit 20 – VOD Ad Revenue, Case #1
Exhibit 21 – VOD Ad Revenue, Case #2
