The thorny problem of how to make VOD (Video on demand) work continues to vex studios and broadcasters. But maybe they just shouldn’t bother. According to a new report from the influential Forrester Research group, downloading pay content from the internet is unlikely to become a mass-market pursuit. Its survey suggests that only 9 per cent of adults have paid to download video from legal suppliers.
“The paid video download market in its current evolutionary state will soon become extinct,” predicts principal analyst James McQuivey. Instead, studios will move to streaming technology funded by advertising. That revenue model (as about to be launched in the UK by ITV.com) offers lucrative advertising potential and effective audience measurement.
If broadcasters really want to attract mainstream viewers “media strategy executives must develop new business models and delivery mechanisms to make video downloading ad-supported and geek-free,” says McQuivey.
In news that will be bad for BT’s newly launched BT Vision VOD set top box (pictured) and the iTunes-fuelled Apple TV system alike, the reports suggests that VOD vendors will be aggressively “challenged by ad-supported broadband Internet video content.”