New research from Mag Rack's video-on-demand markets suggests that nearly all consumers are aware of what VOD offers, about half of all subscribers are accessing on-demand content — and that Mag Rack viewers are twice as likely as non-viewers to order VOD movies.
The survey found that 95% of consumers are aware their systems offer VOD content, while 49% had sampled at least some product.
"That's an extremely strong awareness figure for a new product," said Jill Rosengard, a managing director with Frank N. Magid Associates, which conducted the project for Mag Rack, the Rainbow Media Holdings-owned "suite" of niche-based, on-demand content services.
Understanding digital subs
Of those who accessed VOD, 83% bought movies, 62% viewed some free on-demand content and 51% used subscription VOD programming.
Some 67% said they were likely or very likely to view Mag Rack content, after having seen a one-hour pilot. That's slightly better than the 56% benchmark Magid said it uses to grade broadcast-network pilots.
Mag Rack also found that 60% of its viewers had purchased a VOD movie, compared to 32% of nonusers.
"The goal of the research was to understand the digital customer," said Mag Rack vice president of marketing Beth Sanford.
Interviews were conducted among digital customers who had the service for at least three months. Magid conducted 1,349 short and 512 longer interviews, split down the middle between metropolitan New York subscribers of Cablevision Systems Corp. (corporate parent to Rainbow) and Insight Communications Co. subscribers from several Midwestern markets.
In addition to the high awareness figures, on-demand users skewed younger in age. The 18-to-34-year-old demographic was 16% more likely to use VOD.
Respondents gave the VOD technology higher marks than the breadth of available content. Of those surveyed, 84% were satisfied with the ease of use of on-demand, while 76% indicated they were satisfied with how well the equipment worked.
But only 57% were satisfied with the overall available choices (32% were neutral and 10% were unsatisfied). On the movie front, only 50% were satisfied with the number of titles available (33% were neutral and 15% were not satisfied).
Those results are a bit surprising because both MSOs Cablevision and Insight have deals with most Hollywood studios for hit movie and library product. The June VOD movie lineup, though, was not teeming with a large number of blockbuster titles.
Overall, Mag Rack found that 73% of users were satisfied with the service, while only 5% were unsatisfied.
The survey found Mag Rack users tended to be aged 25 to 44, and were more likely to be college graduates, have incomes higher than $75,000 and subscribe to cable-modem service.
Nearly 80% of Mag Rack's usage comes during non-primetime hours, including 51% in daytime. Usage is spread fairly evenly throughout the week, with a slight spike on the weekend, said Mag Rack executive vice president and general manager Matt Strauss.As the service has added more magazines to its lineup, usage has spread across more titles, Sanford said. In April 2002, the top three titles were Classic Cars
at 15.1%, Cook With the Pros
at 11.5% and Better Golf Club
In March 2003, the top three titles were Personal Trainer
at 9.6%, Your Next Car
at 9.1% and Yoga Retreat
A year ago, the top 10 titles accounted for 77.6% of viewing. In March, that figure dropped to 48.7%. "We've spread usage among more and more titles," Sanford said.
New content also figures prominently. In April, Mag Rack debuted four special Spring on Demand features, with stops at cultural events in Daytona Beach and South Beach, Fla., Denver and Philadelphia. Those four shows ranked third in usage that month.
Magid also polled subscribers about various VOD pricing scenarios, gauging their interest in a $3.95 basic tier VOD package that would contain select programs from their favorite cable channels. Some 34% said they were likely or very likely to subscribe to such a service.
Magid also posed the Netflix question, asking whether consumers were keen on a $19.95 per month package through which they could order any movie they wanted. Some 27% expressed likely or very likely interest in that service.
"This could be an interesting way to stimulate usage," Strauss said.
Despite Mag Rack's best efforts, a percentage of viewers expressed confusion over the service's refresh rate.
Based on those findings Mag Rack, is now completely refreshing four to five magazine titles each week, or about 25% of the service's total content. Magazines are updated in their entirety, Strauss said.
Strauss also said expiration dates have been added to the metadata within the interface, so viewers will know how long each title is available on the service.
Sanford said a new promotional category, "New This Week," has been added to the service, which includes previews of new content, promotions and navigational tips.
Strauss sees good news in the numbers.
"VOD is not broken," he said. People are aware of it and using it. There is nothing wrong with it. There just needs to be more focus on the content."
Strauss believes DVRs will be a hit with consumers, and operators and programmers will have to figure out how to market each technology in a complementary manner.
"There is opportunity in that by creating branded content for VOD it can help add more value to cable," he said.