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VOD Usage Shows Maturity and Fluctuations

Per capita usage of video on demand (VOD) seems to be showing seasonal fluctuations at U.S. cable TV giant Comcast, indicating a degree of maturity that may pop up in broader VOD consumption trends.

Comcast subscribers generated a peak of 44.5 VOD views in Q4 2005 (or 14.8 views per month) and then usage slid to 42.8 VOD views in spring-to-summer Q2 2006, according to analysis by Kagan Research. A view consists of a request for a discrete item of on-demand content.

At the same time, the underlying pool of VOD subscribers keeps enlarging, making VOD a solid growth sector. Comcast's count of VOD enabled subs grew from 7.5 million in Q1 2005 to 10.0 million by Q2 2006. The growing pool drove up Comcast's total VOD views from 278 million in Q1 2005 to 420 million in Q2 2006.

Comcast had 22.4 million total subscribers at end 2005—both digital and analog. Per-capita consumption could climb again if consumers warm to specific programming.
Comcast, among the most aggressive cable system operators deploying VOD, maintains a 95:5 split between free and pay movie views. That means 95 percent of movie views are library titles available at no extra charge in a free or subscription VOD (SVOD) window—offering unlimited usage from a pool of titles.

Comcast says its VOD program pool has 7,000 titles each month that subscriber can pause, rewind or fast-forward. Thus, VOD is mostly a consumer satisfaction tool designed to reduce subscriber churn, rather than run up revenue with per view fees.

Kagan Research estimates the entire cable industry pulled in nearly $1.3 billion from all types of on demand programming, including erotic fare. Cable offers on demand programming on a pay-per-view, near-VOD (NVOD), VOD and SVOD basis.

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