Is There ROI In Video On Demand?
Why VOD? Wny Now?
So why is VOD suddenly hot? It's because the cable companies are finally catching on, says Concurrent vice president of product development Joe Parola.
"VOD is a key differentiator for cable companies, especially with their archrivals the satellite guys," says Parola. "VOD allows cable companies to round out their services and provide a complete digital video package."
The satellite services are not offering VOD, Parola explains. Instead they are offering TiVo-like personal video recorder (PVR) features. Essentially, that means that you have to decide ahead of time what movie or program you want to watch and schedule it to be downloaded to your set-top box during off-peaks hours—say late at night, for example. These PVR systems have inherent limitations that make them far inferior to a true on-demand system, says Parola.
VOD will really take off when consumers start experiencing it, Parola predicts. "Video-on-Demand gives you what you want when you want it, not when some programmer wants to put it on," he says. "When you have VOD, your whole view of TV starts changing." Parola says he told his daughter that when he was a kid he could only get three channels, and she laughed. "Likewise, in the near future, kids will laugh at us when we tell them about TV before VOD," says Parola.
Right now, the consumer segment (read: movies on demand) dominates the Video On Demand market, but that segment will get saturated quickly, says Parola. Then, providers like Concurrent will start more actively pursuing the other niches. Take "business TV," for example. Parola calls it a "nascent market," and says, "We're not seeing a lot of action there, except in some medical areas."
Of course, the ultimate advantage of VOD is its ability to deliver real-time two-way interactivity. VOD could capitalize on interactivity to provide entertainment experiences beyond linear movie viewing. But right now, that idea is fairly embryonic. Concurrent is not yet taking advantage of two-way interactivity, but Parola is confident its time will come. Eventually, he believes, it may even be huge. "There may be some kid in a garage somewhere who is dreaming up some interactive digital video application we've never thought of," Parola says.