Video on demand is fast becoming a significant revenue stream for pay-TV operators with predictions from Time Warner Cable Media that 50% of its revenue may be generated by VoD in less than five years. “In 2014 there were more than 1 billion on-demand impressions generated per month from US cable networks which is starting to generate meaningful revenue,” said Joan Gillman, EVP and COO, Time Warner Cable Media.
In terms of ad-supported VoD she admitted that the operator’s revenue was under 10%. The speed at which it will rise depends on content availability and experimentation with business models. “Consumers do not use the term VoD. TV is TV and that’s the way we think about it. They do not mind advertising if the ad load is well thought out, but they will also pay to receive ad-lite premium content.”
Gillman said the growth of VoD was thanks to a healthy TV ecosystem. “TV is still 93% of all content consumed in the US. Live viewing may be down 8.9% but if you combine live linear with DVR and VoD then TV viewing is increasing by 16.4%.”
Channel 4 sales director Jonathan Allan said VoD will comprise 10% of C4 revenue in 2016. “90% of revenue is still not VoD. But over the last five years the TV market has grown about 20% and our VoD revenue has grown 360%.”
Gary Woolf, EVP business development, digital and insight, all3media international, believed the percentage of revenue producers derive from digital will grow “aggressively. Consumer demand for VoD will double between now and 2019 so broadcast VoD is an important opportunity.”