Cable-based video-on-demand to raise USD2.8bn in 2006
5 November 2002 -- With the growing penetration and increasing breadth of video-on-demand (VOD) content, pay-per-view and subscription, VOD will generate revenue of USD2.8bn in 2006, according to Yankee Group report Video-on-Demand: Sustained MSO Commitment Drives Rapid Growth.
Over the last 18 months, leading cable operators have rapidly deployed video-on-demand (VOD) for three reasons: to differentiate their service from direct broadcast satellite (DBS) services, to improve the value proposition for digital cable and to produce incremental revenue from their upgraded networks.
"Despite falling stock prices and pressure from Wall Street, most major MSOs have continued to deploy VOD," said Adi Kishore, Yankee Group Media & Entertainment Strategies analyst.
"With content availability growing and VOD technology maturing, the supply side hurdles are largely resolved. MSOs must now shift their focus to the demand side and concentrate on marketing and consumer education to drive usage."
The report also found that growing VOD availability and usage will begin to divert video rental revenue. However, rental stores' earlier access to new releases from the major studios will limit the impact over the next few years.