Time spent on-line on the Internet is taking time and viewers away from the TV. There are also signals that Video Over IP and Streaming Video are developing and could possibly become another form of Internet competition.

Perhaps Video On Demand is a technology whose time has come and if it does, it may open entirely new vistas for Marketing and Advertising. Press announcements from set-top box manufacturers, major studios, and cable operators indicate that everything from an Interactive Program Guide from Seachange and TV Guide, to Movie Studio archives like Disney, Sony, Warner, and MGM are going to be made available on-demand along with Personal Video Recorder (TiVo-like) software. For the time being TiVo and it's licensees have a clear field of battle but the degree of engineering to place these functions in all TV cabinets is so insignificant that competition is certain.

Some of the underlying reasons for Video On Demand (VOD) emerging, relates to the success Cable Operators have enjoyed with both TV and Broadband services. Also, the threat they represent to the Studios and Content Owners, has jolted them into action. Then there's the explosive growth of Internet and the possibility of Video and Voice-over-IP as competitors. All of these factors are present in the decision to bring Video VOD on stream. Ovum research forecasts that by 2006 there will be 112 million VOD subscribers in North America.

The major stakeholders are:
o Cable TV and DSL Operators
o Telephone Companies
o Internet & Communications Equipment Manufacturers
o Movie Studios and Content Owners
o Broadcast Network Channel Operators

If VOD takes off, it is yet another signal that consumers have an unsatisfied need to control their purchases. Being able to watch what they want, at a time they wish to view it, is very appealing. From a Marketing perspective, it may open new areas and opportunities to present your message.

First, this audience will represent a new and highly qualified viewer. A viewer who’s preferences can be tracked relative to the programming they request. It is not yet clear, how, or if, it will be run as a pay-to-view service or utilize an advertising paid model.

You should note and utilize the fact that this shift represents taking control away from broadcast network and cable executives and placing those decisions in the hands of your prospects and customers. The behavior is the same "prosumer" pattern that is happening on the Internet. A consumer targeted CD from TiVo is the one place we’ve seen the "customer takes-control" theme expressed. The CD was excellent and effective. We expect to see more ads that focus on the emergence of the prosumer.

Terry and Lisa Wellman

Copyright Digital Marketing Corporation, December 2003, Mercer Island WA - all rights reserved

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