The Latest News in VOD
As video-on-demand (VOD) continues to play an increasingly important role in the business model for cable operators, a number of innovations advancing the management, distribution and monetization of VOD content will be making their way to cable headends in the year ahead, including techology advancements that allow cable-system operators to expand the scope and depth of their on-demand content offerings.
As an example, Comcast Media Center and other VOD content distributors are sourcing VOD content from mezzanine files, allowing the encode of content from very high bitrate sources while transcoding to significantly lower bit rates. This approach allows for more content with higher video quality and less storage overall, and the importance of quality for video on demand cannot be overstated.
Advances that allow cable operators to increase their libraries are also important for maintaining a competitive advantage. Today, satellite operators offer 1,000 or more VOD titles to their customers not only for parity with cable, but to also address the challenges both groups face from online video service providers.
The competitive landscape is analogous to a quality and quantity arms race between platform videos. Offering a competitive lineup of video content and a superior viewing experience will be critical for retaining digital video customers and increasing pay-per-view and subscription VOD revenues.
Advertising revenue is also an important part of VOD’s contribution to the business models of both cable programming networks and cable MSOs. Rentrak’s 2012 analysis found that viewing of free VOD content experienced 17% growth, with viewers watching an average of five hours and 17 free on-demand (FOD) television shows or videos per month, and representing more than $1 billion of annual advertising revenue.
These drivers are helping to focus our industry engineers on enhancements to our infrastructure that can be implemented easily, quickly and cost-effectively. They allow cable system operators to increase their revenues and improve their competitive positioning while making incremental investments in existing equipment.