SOURCE: The Diffusion Group

The Diffusion Group

March 05, 2012 09:00 ET

Netflix Streaming Nearly Double That of PayTV VOD

New TDG Report Identifies Shortcoming of Ad-Supported VOD and Its Growth Opportunities for PayTV Operators

FRISCO, TX--(Marketwire - Mar 5, 2012) - According to a new report released by TDG, Making Ad-Supported VOD Work, video-on-demand services provided by PayTV operators should be generating significantly higher viewing and advertising revenue. The failure to accomplish this is a reflection of VOD's inadequate advertising support and awkward program guides that limit availability and viewing of ad-supported video-on-demand content.

According to TDG, as a result of PayTV operators' lack of attention to ad-supported VOD, total VOD use is small, representing only 1% of all U.S. TV viewing. According to Bill Niemeyer, TDG Senior Analyst and author of the new report, "Operators have failed to take advantage of VOD to build subscriber satisfaction, generate ad revenues, and head off competition from over-the-top (OTT) providers like Netflix." Niemeyer estimates in Q4 2011, Netflix U.S. subscribers watched 80% more streaming video hours than were viewed in the same period on all U.S. PayTV VOD.

"Ad-supported VOD is a significant missed opportunity for PayTV operators," notes Niemeyer. "They are investing significant resources in TV Everywhere (TVE) but have ignored the fact they have a potentially viable ad- and revenue-generating on-demand platform already in place in over 50 million U.S. homes in the form of VOD."

TDG's new report describes how operators could increase VOD viewing and ad revenue by a factor of three or more by deploying dynamic ad insertion, better measurement technologies, and improved program guides. If operators do not act, they risk falling even farther behind online and OTT video services.

Making Ad-Supported VOD Work includes the results of conversations with key executives in the TV network and ad agency community. It identifies eight specific areas where operator action will improve the VOD platform. The report offers in depth quantitative estimates of how VOD use and advertising revenues would grow if the operators act to enhance VOD for ad-supported content.

Making Ad-Supported VOD Work is now available for purchase. For more information about this new report, please contact our Research Services Team at 469-287-8050.

About The Diffusion Group

TDG provides actionable intelligence on the quantum shifts impacting consumer technology and media behaviors. Since 2004, our market research and advisory services have helped technology vendors, media companies, and service providers understand how consumers access, navigate, distribute, and consume broadband media -- whenever and wherever they may be.

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