The battle for the viewer will likely depend on the access to and breadth of VOD content. As we become a society that requires immediacy and what we want, when we want it, companies that best handle the speed and variety of on demand, will get our business.
"VOD will account for about 13% of IPTV revenue in 2012, up from 3% last year, as telecommunications companies try to use their on-demand offerings to compete against the more established multichannel system operators, according to research firm Gartner." And the fight for content will grow as HD content becomes more commonplace and preferred. Telcos have built their plants to handle these huge streams of information; older cable systems, not yet rebuilt, may face an uphill battle as consumers, turned off by the latency and limited choice, seek alternative sources for content. And in fact Direct TV is now beginning to offer a VOD model to compete in this space, although it requires a broadband connection in addition to the satellite.
And this growth in VOD content will enable new revenue streams to grow as well. Pre roll advertising in front of free content, overlap ad messages, increased transactional business, e-commerce opportunities, etc. This surge in VOD offerings will continue to propel this model forward. "Internet-protocol TV service providers such as AT&T and Verizon could see revenue from video-on-demand jump more than tenfold in the next four years. This will come from fiber-optic TV services taking market share from cable and satellite companies, while more people watch VOD and pay-per-view titles."
VOD is growing in usage and appeal with consumers. It is where the battle is being fought among cable, telco, and satellite. As interactivity becomes more commonplace, it is the companies that best serves up and prices this content competitively that will maintain dominance.
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