Movies on-demand (MOD) can generate significant revenue for operators — and serve as a digital-cable retention tool — if adequately marketed and promoted, according to an In Demand survey on consumer MOD and video-on-demand attitudes and usage.
The survey, conducted by Lieberman Research Worldwide earlier this year, suggests that consumers would be more than six times more likely to order films on demand than they would via traditional cable.
The survey of more than 1,000 consumers indicated 60% of consumers strongly agreed MOD would make it easy for them to watch a movie whenever they want, trumping other forms of home-movie delivery.
"With home-video revenue to PPV revenue about 10 to 1, it suggests the potential is to get to 60% of what the entire video rental business currently generates," In Demand senior vice president of marketing Sergei Kuharsky said.
But the survey found nearly half of all cable and satellite subscribers have never heard of MOD or VOD.
Those with some knowledge of the platform have trouble grasping the on-demand concept, which includes VCR-like functionality.
"The survey suggests that we all need to do a better job in educating the consumer about what the benefits of VOD and MOD are," Kuharsky said. "This product, like TiVo or other new concepts, is difficult to communicate in a 30-second TV spot. The V-8 moment seems to happen when people get the remote in their hand and use it."
Kuharsky said operators should target groups most likely to use MOD.
Baby boomers tend to purchase more on-demand product, as do young singles and middle-aged parents who spend most of their free time with their families.
"I think one of the key findings is that one size doesn't fit all when you're talking about marketing VOD — there are really distinct consumer groups that are interested in VOD, but for somewhat different reasons and they have different hot buttons," In Demand vice president of research Jo Holz said. "We really need to understand where the consumer is coming from."
- Consumers said they would be willing to pay an average of $4.40 for on-demand movies.
- 26% of respondents would be more likely to order MOD if films were available day and date with home video, rather than the current 45- to 60-day window.
- 18% of satellite subscribers would switch to cable to access MOD.
- One in four cable subscribers would be likely to order a premium network's subscription VOD service.