VOD Homes Grow to 2 Million

[Steve Mehs]

Research from Strategy Analytics predicts that half of U.S. homes will be regular video-on-demand users by 2008, spending $26 billion on VOD services during the next seven years.

The research firm found that more than 8 million U.S. homes are passed by VOD-capable cable networks. The number is expected to rise to nearly 50 million by the end of 2003.

Activated VOD homes (those with set-top boxes loaded with VOD software) number about 2 million today, and could rise to 7.6 million by end 2002, Strategy Analytics said.

VOD revenues are forecast to reach $287 million in 2002, but will then rise rapidly to reach $3.5 billion by 2005 and $8.2 billion by 2008. Subscriptions will be the leading VOD business model, accounting for nearly two thirds of revenues, according to the research firm.

From SkyReport (http://www.skyreport.com) (Used with permission)

[jegrant]

Where is the compelling VOD content?

I live in one of those homes which is both passed by (connected to) a VOD-capable network and contains a VOD-software activated set top box, but I have yet to order one VOD.

Most of the stuff on our "On Demand" channel is already available on VHS and/or DVD, if not all of it - the exception might be some of the TV series and specials that are available for 99 cents or $1.99. All the movies though, are definitely available somewhere else. We purchase lots of VHS videos, so pretty much anything I want would be available.

The only thing I have heard of that would interest me, perhaps, is HBO On Demand and possible Starz/Encore networks' VOD offering. However, neither of those are currently offered by my cable provider (Insight Communications). Rumor indicates they are in discussion with Starz for my market, and I know they carry HBO in another market, but nothing has happened yet.

The only time I even considered using VOD was when I had a coupon the cable company sent, and it expired before I remembered to call them and have them activate VOD on my box.

The stuff on Pay Per View, even Dish On Demand, is more recent than what I see on VOD.