Video-on-demand is now offered in approximately 40% of U.S. cable systems and
nearly 4 million subscribers are regularly hitting the play button, according to
a new study by In-Stat/MDR, a sister company to Multichannel News.
In-Stat predicted that worldwide, the VOD-subscriber count will rise from
about 5 million by the end of this year to almost 14 million in 2007.
A recent In-Stat survey of 1,000 North American households found that about
70% of respondents were aware of VOD and the take rate for the services was
But home video products -- including video recorders, DVD players and
digital-video recorders available at retail -- continue to pose a competitive
challenge to such services, according to the study.
The study also found that the cost per stream to deliver VOD services has
fallen below the $400 mark, although some operators are still worried that the
cost to provision VOD is still economically unfavorable.
"However, the majority of cable operators are less concerned about the
short-term economics of VOD and are treating the service as a key differentiator
in the continuing battle between digital-cable-TV services and satellite-TV
services," according to In-Stat analyst Mike Paxton.