Skip to main content

Video Subscription versus Pay-per-View Model

Pay-TV Video on Demand (VoD) that's delivered directly to the television is generating consumer interest, but very little revenue for service providers. Free content currently accounts for more than 95 percent of the video being watched.

A new pay-TV market study by Futuresource Consulting predicts that some consumers will pay extra for movies on demand. The question that remains is what's the consumer-preferred method -- payment by monthly subscription, or pay-per-view?

Futuresource forecasts that by 2013, transactional (pay-per-view) revenues from movies on demand will reach $2.4 billion in the USA and 430 million Euros in the leading five Western European countries.

"The rise of on-demand video content that can be accessed through a laptop, PC or mobile phone shows no signs of stopping," says Carl Hibbert, Business Consultant, Futuresource, "and with so much competition out there, the consumer is in the driving seat, demanding entertainment be delivered on their terms, whenever, wherever and however they please."

The pay-TV industry is looking to VoD to supplement its linear scheduled TV offering. As well as improving their consumer proposition, reducing customer churn and recalibrating their brand positioning. Operators are attempting to use VoD to drive up the average revenue per user (ARPU), rather than improve their actual profit.

Paid-for VoD is a small part of the market, but it is expanding, and that's despite the glut of readily-available free and catch-up VoD. Growth opportunities are coming from the continued conversion of analogue to digital cable, the expansion of IPTV, and the introduction of hybrid services by satellite operators.

As movie release windows shorten and VoD releases come on stream day-and-date with DVD and Blu-ray, Futuresource believes we're going to see more traction. That said, a number of studios are holding back, believing this may cannibalize their packaged media revenues.

Apparently, improved electronic program guides (EPG) will also help to boost VoD buy rates, making content search and purchase easier, and in some cases allowing for more personalized services.

In this context, the definition of "personalization" seems subjective.

Futuresource says that the next user experience enhancement is "lifestyle-orientated" TV homepages, which will help to filter and focus all the live and on-demand content available. Thereby enabling the consumer to pinpoint and purchase relevant content as soon as it becomes available.

In contrast, I believe that a truly personalized "recommendation-oriented" playlist -- similar to the Netflix member Queue concept -- will become the most preferred method to consume video. Furthermore, the flat-fee monthly subscription model will gain more adopters than the legacy pay-per-view model.

Popular posts from this blog

Why Healthcare and Smart City Apps Drive 5G IoT

Fifth-generation (5G) wireless technology for cellular networks is a successor to fourth-generation (4G) wireless technology. By 2023, Juniper Research anticipates that there will be over 1 billion 5G connections globally. The technology will provide the data infrastructure for the advancement of wireless communications and for new developments in the Internet of Things (IoT) -- including smart cities and healthcare. 5G IoT Market Development According to the latest worldwide market study by Juniper Research, 5G IoT connections will reach 116 million globally by 2026 -- that's increasing from just 17 million connections in 2023. Juniper analysts predict that the healthcare sector applications and government or other smart city services will drive this outstanding 1,100 percent growth over the next three years. Juniper examined 5G adoption across key industry sectors -- such as the automotive, mobile broadband, and smart homes -- and forecasts healthcare and smart cities will accoun

How Savvy Leaders Re-Imagine Work in 2023

As we look to the year ahead, there will be significant challenges and opportunities facing the Chief Human Resource Officer (CHRO) role. In order to be successful, savvy HR leaders must be prepared to take proactive steps that adapt and evolve. "HR leaders have faced an increasingly unpredictable environment amid many organizations mandating a return to office, permanently higher turnover and burnt out employees," said Emily Rose McRae, senior director at Gartner . HR Innovation Market Development One of Gartner's key predictions for 2023 is that the use of artificial intelligence (AI) and automation will continue to increase within the enlightened digital workplace. This transition will require HR leaders to develop new skills and competencies in order to effectively manage and lead teams that are increasingly relying on these enabling technologies. Additionally, HR leaders will need to ensure that their organizations are investing in the necessary infrastructure and re

Top 10 CFO Priorities Require Rethinking Finance

The Chief Financial Officer (CFO) role is essential to digital business growth. While CFOs do not get closely involved in the tactical details of the digital transformation of their functions, they still recognize its strategic importance. According to the latest survey by Gartner, CFOs are faced with the challenge of balancing the need for substantive digital business innovation with financial cost control and risk management. "CFOs will be stretched thinly across many activities in 2023. The survey revealed a wide range of actions CFOs plan to either lead or be significantly involved with," said Marko Horvat, vice president at Gartner. Survey Findings: The Top Ten Priorities Cost Optimization - Cost reduction remains the top priority for CFOs as they look for ways to cut costs and improve efficiency in their operations. This includes identifying cost-saving opportunities through automation, outsourcing, and business process improvement. Business Continuity - The global C