VOD: Industry Needs Consensus Models

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Philadelphia -- The industry will have to find a consensus sales and distribution model for on-demand services if it is to fully take advantage of the technology and stay ahead of its satellite competitors, according to executives speaking at a Cable & Telecommunications Association for Marketing CTAM Summit panel session here Monday.

With a number of operators offering different models for on-demand, ranging from Comcast Corp.’s free video-on-demand to Cablevision Systems Corp.’s subscription-VOD-based efforts, panelists speaking during a session on monetizing advanced video services said an industry-standard model has to be developed in order to maximize the message to consumers.

If not, the industry risks losing its lead positioning with consumers regarding VOD to satellite providers DirecTV Inc. and EchoStar Communications Corp. Both companies are working on pseudo-VOD distribution through content-downloading to digital-video recorders.

“We need to own this [technology] while we have an opportunity to do so,” Time Warner Cable senior vice president of programming Lynne Costantini said.

On the content end, Scripps Networks senior VP of emerging media Channing Dawson said content providers are still wary of providing proprietary programming for a VOD platform unless a financially viable business model emerges, whether from advertising or subscription fees.

“We have to monetize [VOD] or we can’t play in the game,” he added. But from an advertising standpoint, Costantini said, the audience-measurement technology from Nielsen Media Research hasn’t caught up with the product, making it difficult for advertisers to support on-demand programming. “We need to work harder to make [the business model] work for it to be a win-win for programmers,” she added.

She also said the MSO is working on other technological advances, including anti-skipping commercial technology to make the platform more advertising-friendly and to entice programmers to offer earlier windows on popular content.

Along with providing short-form on-demand programming that can be ad-supported, she said, the industry should look beyond traditional advertising models to make the business financially viable for all involved.

As for other new technologies, such as HDTV, Showtime senior vice president of marketing Geof Rochester said there are opportunities to pass the cost of HD programming to the consumers as the technology grows. And as HD-production costs decrease over time, Dawson said, more programming can be developed, including in such genres as animation.

But in today’s world, Dawson said, networks need a little financial “stimulation” to jump-start the market before programmers begin to invest in developing HD programming.

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