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VOD is a Numbers Game

GigaOM Pro Digital Home reportThis morning I read through a new report from the GigaOM Pro service on “The Ongoing Battle for the Digital Home”. One nugget I took away (and that I’ve heard before) is that VOD viewership is substantially higher that Internet video viewing. According to the report’s author Daniel Taylor, an average VOD session clocks in at 35 minutes. So while consumers watch a greater variety of video clips online, the time spent with VOD from a TV service provider far outpaces time spent viewing video on the Internet.

The stat is interesting for several reasons. First, the numbers are completely opposite of what you might expect just from reading the press. How often do you see a mainstream blog post or article on VOD? Now think about the number of times you’ve read about Hulu.

Second, while VOD is growing in popularity, the numbers don’t yet represent significant financial success, at least in terms of new revenue. The impact on customer retention may be a different story, however. Which bring me to point number three.

According to the Digital Home report, consumers don’t spend much on media outside of their pay-TV bundles. Which means that as long as pay-TV providers can hold on to subscribers, they will continue to rake in the largest share of the digital home pie. Consumers may spend a few bucks to download a movie or a game now and then, but household trends show that the bulk of their money will continue to go toward subscription entertainment.

The VOD numbers here are just the tip of the iceberg for the Digital Home report. And if you’re looking  for more, I highly recommend getting a subscription (yes, a subscription) to the GigaOM Pro service. At the ridiculous intro price of $79 per year, it’s a steal.

5 Responses

  1. […] tidbits on WiMAX uptake, new city launches, and new pricing schemes. I’m a big fan of the new trend toward affordable research, and it doesn’t get much more affordable than $4.95 for a professional analyst report. Some […]

  2. […] recording to the mass market. They made in-home TV networking possible. They’ve enabled the growth of Video on Demand services. And they’re supporting new interactive TV […]

  3. […] love subscription models because they promise predictable revenue and tend to encourage higher spending. Cable knows this, but so do Netflix, Roku, and Hulu, all of which already use subscriptions or are […]

  4. […] may move to a subscription-based video model. This seems likely from a business perspective. Why? Subscription services work, and you can’t make and distribute TV content for free. (See Mark Cuban’s latest […]

  5. […] pay more for media when it’s delivered in a subscription model. But mobile apps, which represent one of the biggest entertainment trends in years, haven’t […]

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