With free video-on-demand usage continuing to surge, Rentrak estimates the platform represents at minimum a $1 billion advertising opportunity.
In its "Rentrak State of VOD: Trend Report 2011," the Portland, Ore.-headquartered measurement company pegged free video on demand usage at 6.8 billion transactions last year, up 17% from 2010. Given that much of FOD fare comprises top cable and broadcast network shows and that users are watching five hours and 17 FOD TV show or videos per month, Rentrak estimates the potential value of this inventory at the nine-figure level as ad-insertion capabilities advance. Each month, Rentrak reported, 33.8 million set-top boxes accessed free content.
All told, the report calculated the total number of VOD transactions at 8.8 billion in 2011, 12.8% more than the 7.8 million in 2010. By its count, Rentrak found that 55 million U.S. households have access to VOD, with the average home consuming eight hours of content per month. The TV entertainment category, which includes programming from the top linear broadcast and cable networks, is now the top FOD category by transactions, up from third last year, according to the study.
"We like to think about VOD as the power of eight-plus! In the eight years since VOD has taken off, homes now watch eight hours of VOD a month and 80% of that is free TV programs, with more than 80% of the free TV program viewing occurring after the first three days of availability on-demand," said Cathy Hetzel, corporate president at Rentrak, in announcing the report's release. "Combine that with the potential ad sales of a billion dollars and you have one powerful medium."