A new report suggests that lack of free content is suppressing demand for VOD television services.
The research, from Forrester Research, said while movie buys and usage of subscription content such as HBO On-Demand are increasing, the VOD model is languishing to some degree, largely because of the reluctance of cable operators to pay for quality programming.
VOD is now available to nearly 19 million homes — or about 75 percent of the U.S. digital cable universe, said Forrester.
For networks, these programs could increase audiences by capturing viewers who missed programs at their original airing time. And if ads encourage the producers of popular programs to place them in free on-demand areas, consumers — and cable operators — will also get what they want.
Still, Bernoff said that despite the best efforts of the advertising industry, marketers have yet to get excited about video-on-demand. “VOD experiments have brought in less than $15 million in ad revenues so far,” Bernoff said. “Why? Because there’s no viable model yet for on-demand advertising.”
The main hurdle to overcome is measurement, Bernoff said. Once a viable system of metrics can be instituted, advertising on demand will help gain approval from marketers to support VOD.