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19th July 2004 - While cable Video-on-Demand (VOD)
service might never be a huge revenue generator, it
can still serve as an important service "differentiator"
in terms of comparing digital cable TV services to satellite
TV services, according to In-Stat/MDR (http://www.instat.com).
The high-tech market research firm reports that even
as the number of VOD users is on the rise, consumer
interest in VOD service remains lukewarm due to concerns
about pricing and a continued lack of compelling content.
From the perspective of potential VOD users, a recent
In-Stat/MDR survey showed that cable-based VOD services
enjoy a high level of consumer awareness: 80% of surveyed
U.S. households are now familiar with VOD service. The
survey also showed that the percentage of cable TV households
who were regular VOD users, the so-called "take
rate," was only 8%. This percentage indicates that
VOD service will likely remain somewhat of a niche cable
service over the next few years.
On a more positive note for VOD, the current 'Cost-per-Stream'
for cable VOD service has dropped to approximately $300,
so most operators now consider the economics of provisioning
VOD services to be favorable. As a result, US cable
TV operators are increasing the availability of VOD
services, while at the same time experimenting with
different types of VOD service and programming packages.
In-Stat/MDR has also found that:
- Cable-based VOD service remains scarce outside of
North America. Although the first significant service
trials and deployments occurred in the past year in
Europe and Asia, over 99% of all cable VOD users are
still in North America.
- By 2008, worldwide cable VOD subscribers are forecasted
to reach 17 million.
- As of mid-2004, approximately 50% of all US cable
TV systems were offering VOD, and over 5 million US
cable TV households were regularly using the service
to watch movies, SVOD programming, and even "free"
shows and events.
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