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VOD Gets Boost from Free Content

Growth in Free-on-Demand (FOD) services and content over the past year has significantly increased overall consumer awareness of and usage of Video-on-Demand (VOD), reports In-Stat. Some leading cable operators like Comcast and Cablevision Systems believe that FOD services are a key differentiator in their battle with Direct Broadcast Satellite services, and they are pressuring content developers to supply them with even more FOD content. "There were approximately 7.5 million worldwide cable-based VOD users at the end of 2004," says Mike Paxton, In-Stat analyst. "VOD user growth is projected to remain strong for the next several years. Total worldwide users are forecasted to rise to almost 13 million at the end of 2005, and ultimately reach 34 million in 2009."

In-Stat's report found the following:

- Based on an end-user survey, 25 percent of all US cable TV subscriber households have tried VOD.
- The "Cost-per-VOD Stream," which measures the total cost of equipment and network operations needed to deliver VOD service to a home, dropped from $300 in mid-2004 to $250 in mid-2005.
- Although the majority of cable VOD service deployments are in North America, during the past year, cable operators in Great Britain, Japan, South Korea, and Israel have launched VOD services.
- Worldwide revenues from cable VOD services totaled $526 million in 2004. While this total was a 55 percent increase over 2003, cable VOD revenues continue to lag user growth as FOD services increase in popularity.

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