Interest in watching television series on video-on-demand has surged in the past three years, according to a recent study from VOD research firm Marquest Media & Entertainment Research. At the same time, interest in watching movies, news and sports, and personal and how-to programming has remained flat, though overall interest in VOD is growing. Consumers remain interested in movies on demand, but they are increasingly interested in series, too.
The interest in TV series is not surprising. The availability of full-length prime-time programming on online video services such as iTunes, MSN and Google, as well as network Web sites, has fueled usage of such services in the past year. In addition, VOD proponents have contended for the past few years that the medium needs more top-tier network programming in order to grab consumer interest. Some broadcast networks, such as NBC and CBS, offer their prime-time shows on VOD, while HBO’s series have been a big driver for VOD usage for years.
The Marquest data comes from an analysis of the firm’s Marquest On Demand Menu Planner Studies from 2004, 2005 and 2006. These signature research reports from the market research firm gauge interest in several VOD categories.
In those studies, Marquest measured interest in 47 programming genres and then grouped those genres into seven categories.
“Viewer interest in using VOD to access programs in these categories stayed relatively flat, except for entertainment series, which increased significantly from 2004 to 2006,” said Paul Rule, president of Marquest. “Scripted dramas and sitcoms, both current and past, accounted for most of the gain, while unscripted shows and soap operas showed little change.”
The average score is based on an index measurement, with entertainment series indexing at 61 in 2004, with 100 being the average. By 2006 that index had increased to 109. “Simply put, in 2004 this category had ranked near the bottom of the seven categories. By 2006 it had increased to second place, outranked only by movies, which has consistently been the top-drawing category for VOD,” Mr. Rule said.
In addition to series and movies, the other five categories are documentary/nonfiction, general entertainment (specials, music videos, short cartoons, etc.), news and sports, personal development/how-to programs and miscellaneous (kids shows, religious programs, etc.).
Mr. Rule said he believes the increase in interest stems from the effort networks have made to promote the availability of their series on VOD and supplementary material from those shows on VOD and on Web sites.
“Users are more aware that on-demand is available as part of their digital cable,” Mr. Rule said. “And as users get more used to cable on demand and on the Internet, and you couple that with more and more network programming available on alternative sources, the whole picture suggests increasing interest.”
He added, “While the studies have not explored the reasons for any changes, a speculation would be that cable and broadcast networks’ promotional messages alerting viewers that scripted entertainment series episodes are available on VOD and Web sites may have accounted for much of the increased interest. In contrast, the general entertainment category, which includes short-form content such as music videos and one-time events such as concerts, did not show notable growth.”
The message is simple for networks: Make more shows available on VOD and promote “the dickens out of it,” Mr. Rule said. HBO tags most of its linear series with announcements promoting the show’s availability on HBO on Demand the next day.
While interest in watching TV series on VOD is rising, so is overall usage of the medium. Leichtman Research Group reported recently that 60 percent of digital cable customers used VOD in 2006, up from 50 percent in 2005 and 25 percent in 2004.
But TV shows won’t be the only category that will grow usage of VOD, said Brahm Eiley, analyst with Convergence Consulting Group.
“Much of what has kept VOD back is movies have not been available in the same window as store-bought or rented DVDs,” he said. “We believe the current VOD trials by Comcast and Time Warner Cable, in which movies from the major studios are being provided in the same window as the DVD store, will ultimately move from trial to full commercial deployment. This will help boost VOD in a big way.”
Convergence Consulting predicts VOD revenue will grow to $1.6 billion this year. By 2010, that number should hit $3.9 billion. On a per-subscriber basis, VOD spending per year will grow to $72 per customer in 2010, up from $50 this year.