Direct Response Marketing

Cable Stations Adapt to VOD Popularity

11 Nov, 2004 Response This Week

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MELVILLE, N.Y.- While video-on-demand (VOD) is becoming increasingly popular among cable subscribers, the demand poses problems for cable companies, TV networks and production studios, according to a Newsday report.
VOD is a new service that has been around for about five years. It enables TV watchers to select TV programming and start it from the beginning, pause it, rewind it or fast-forward with their remotes.
Now that more customers are catching on to the technology and recognizing the convenience that the service provides, they are looking for more and more selections to choose from. But the cable companies and TV stations are at a touch-and-go stage where they are still trying to figure out the best way to make a profit and continue building VOD popularity among consumers.
VOD is especially important to cable stations because it keeps customers from subscribing to satellite television. The media companies are still deciding if they should provide a multitude of VOD selections for free or if they should charge per program or per collection of programs.
Some cable companies, namely Comcast, the nation’s largest cable provider, want to give VOD away for free. They believe that it will entice more customers to keep their cable services instead of switching to satellite and increase VOD awareness and usage. Others want to charge for the service.
Programmers appear to be equally divided. Some argue that if they provide an abundance of selections for VOD, then they deserve the extra compensation. Others want to provide the programming in order to increase exposure.
By 2005, it is estimated that more than 23 million cable subscribers nationwide, including 1.8 million in the metropolitan area, will use VOD service, according to Forrester Research. It is also estimated that the current number of subscribers will almost double by 2009.

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