Video on Demand VOD In The News

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Video on Demand (VOD)In The News
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Changing the Ways Information is Consumed

• Entertainment consumers today are more
  technologically empowered than ever before.
  Computers, cell phones, Internet access and
  multi-channel program subscription services have
  all reached mass market adoption, and have set
  the stage for the next chapter in the evolution
  of how video, music and information will be
  delivered and consumed.

Source Nielsen Analytics Press Release
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Table of Contents
Slides VOD Definition 4 VOD Penetration
Estimates ABI Research 5 Magna
Global 6-8 Veronis Suhler Stevenson 9-16 A2/M2 17
-19 Portable Devices 20-26 Computer
Screens 27-30 Television 31-33
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VOD (Video-on-Demand) Definition

• An umbrella term for a wide set of technologies
  and companies whose common goal is to enable
  individuals to select videos from a central
  server for viewing on a portable device, computer
  screen or television. VOD can be used for
  entertainment (ordering movies transmitted
  digitally), education (viewing training videos),
  and videoconferencing (enhancing presentations
  with video clips). Although VOD is being used
  somewhat in all these areas, it is not yet widely
  implemented. VOD's biggest obstacle is the lack
  of a network infrastructure that can handle the
  large amounts of data required by video.

Source www.webopedia.com
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VOD Penetration Estimates

• Traditional video-on-demand services may not be
  growing at a particularly rapid pace, but the
  introduction of time shifting, network PVR, and
  mobile video will propel the demand for VOD
  technology as the number of concurrent,
  time-shifted streams of video grows rapidly.
• In fact concurrent VOD streams worldwide will
  explode from 1.67 million in 2005 to 163 million
  in 2011.

Source ABI Research Press Release 10/9/06
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VOD Penetration Estimates

• By 2010, MAGNA Global expects that true
  Video-on-Demand (distinct from the simulated VOD
  offered by DBS providers DirecTV and EchoStar)
  will reach 65.6 million households (more than 90
  of cable subs and 100 of telco subs).
• This compares with 26.5 million VOD households
  (24.2 of total TV Households) at the end of 2Q06.

Source MAGNA Global On-Demand Quarterly, Second
Quarter 2006 Review (Sept06)
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VOD Penetration Estimates
VOD Penetration Actuals
Source MAGNA Global On-Demand Quarterly, Second
Quarter 2006 Review (Sept06)
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VOD Penetration Estimates
VOD Penetration Estimates
Source MAGNA Global On-Demand Quarterly, Second
Quarter 2006 Review (Sept06)
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VOD Penetration Estimates

• The VOD market has emerged as a key growth
  driver in the cable TV segment. Of particular
  concern to cable operators , however, is the
  tendency for consumers to choose free VOD over
  paid VOD.
• The number of residential households with access
  to VOD grew 20.7 to 23.9 million.

Please note that Veronis Suhler Stevenson
refers to VOD in the television sense only, and
views the computer screens and hand-held devices
in a different context.
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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VOD Penetration Estimates
Veronis Suhler Stevenson, PQ Media,
JupiterKagan Wired cable homes only. Satellite
providers do not have the technology to offer VOD.
The 2000-2005 Compound Annual Growth for Total
VOD Residential Households was 71.7.
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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VOD Penetration Estimates
Veronis Suhler Stevenson, PQ Media,
JupiterKagan Wired cable homes only. Satellite
providers do not have the technology to offer VOD.
The 2005-2010 Compound Annual Growth for Total
VOD Residential Households is forecasted at 15.9.
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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VOD Penetration Estimates
Veronis Suhler Stevenson, PQ Media,
JupiterKagan Wired cable homes only. Satellite
providers do not have the technology to offer VOD.
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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VOD Penetration Estimates
Veronis Suhler Stevenson, PQ Media,
JupiterKagan Wired cable homes only. Satellite
providers do not have the technology to offer VOD.
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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Spending on Internet Downloads of TV Programs
VOD Penetration Estimates
Veronis Suhler Stevenson, PQ Media, iTunes, Nexix
Lexis Includes broadcast and cable television
shows. Excludes music video downloads.
The 2005-2010 Compound Annual Growth
is forecasted at 131.9.
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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VOD Penetration Estimates

• Mobile television is generating the most
  excitement in the mobile content sector.
  Consumers using this service have shown a
  propensity for viewing movie trailers, sports and
  news clips.
• It is expected that the number of subscribers who
  watch video from their phones will increase from
  1.2 million in 2005 to 38.4 million in 2010.
• Only a few companies have offerings in mobile TV
  in the U.S., including Verizon (V Cast), Sprint
  Nextel (Sprint TV) and Cingular Wireless, of
  which only Sprint TV offers live content.

Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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Spending on Mobile TV
VOD Penetration Estimates
Source Veronis Suhler Stevenson Communications
Industry Forecast 2006-2010
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Anytime Anywhere Media Measurement (A2/M2)

• Integrating Television and Internet Measurement
• Tracking Portable Media Devices

Source Nielsen Media research 6/14/06
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Integrating Television and Internet Measurement
(Highlights)

• From Nielsen//NetRatings, the introduction of an
  Internet audience measurement service that
  measures streaming video for media and advertiser
  clients.
• The addition of Internet measurement to Nielsens
  People Meter samples, creating a single panel
  measuring the convergence of television and
  Internet video consumption.
• An integrated TV/Internet product based on the
  fusion of data from Nielsen Media Researchs
  People Meter samples and Nielsen//NetRatings
  Internet panels.

Source Nielsen Media research 6/14/06
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Tracking Portable Media Devices (Highlights)

• The development and testing of meters to measure
  video on portable media devices such as MP3
  players and cell phones.
• The introduction of multiple tracking studies to
  measure the penetration of all varieties of
  portable media devices and the amount of video
  usage of each.
• The rollout of a 400-person iPod panel.

Source Nielsen Media research 6/14/06
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Portable Devices

• JupiterResearch predicts that advertising for
  messaging and display ads for mobile devices will
  more than double over the next five years, rising
  from 1.4 billion in 2006 to 2.9 billion by
  2011. The rise will not come without some
  fundamental changes, however.
• Harris Interactive found that 26 of current
  mobile phone subscribers would be willing to
  watch advertising on their mobile phone if in
  return they received free applications.
• A much smaller number, only 7 of wireless
  subscribers, said they would be interested in
  receiving promotional text messages if they were
  relevant.
• The growth of mobile phone advertising is coming,
  but not without some trials and tribulations
  first.

Source 11/2/06 eMarketer
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Portable Devices

• According to Telphias Mobile Video Diary Report,
  30 percent of mobile video users watch mobile TV
  and video clips on their cell phones during the
  hours of noon and 4P, and 31 percent watch during
  the early evening commute hours of 4-8P.

Source Telephia Mobile Video Diary Report, Q2
2006
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Portable Devices

• Contrary to popular belief, mobile video usage is
  being consumed by older age groups, not just the
  18 years old. Fifty percent of mobile video users
  are 25-36 years old, compared to 24 percent of
  the total mobile population.

Source Telephia Mobile Video Diary Report, Q2
2006
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Portable Devices

• In terms of gender, mobile video does resemble an
  early adoption profile, where seven out of ten
  users are men, compared to a nearly even
  male/female ration for all mobile subscribers.

Source Telephia Mobile Video Diary Report, Q2
2006
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Portable Devices

• Mobile video user demographics show an ethnically
  diverse population, with 16 percent of mobile
  video users being African-American and 27 percent
  Hispanic, compared to 11 percent for each group
  for general mobile subscribers. In contrast,
  Caucasians under index for mobile video usage.

Source Telephia Mobile Video Diary Report, Q2
2006
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Portable Devices

• The IDC research firm says that by 2010, about 24
  million consumers representing 9.2 of the U.S.
  cellular subscribers will watch TV or video on
  mobile handsets, up from about 7 million this
  year. Revenue will roughly quadruple and exceed
  1.5 billion.

Source 8/17/06 USA Today
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Portable Devices

• Mobile broadcasting is expected to rapidly become
  the model of choice for distribution of live
  television and movies to mobile devices in the
  US, and by the end of 2007 approximately 4
  million subscribers will receive entertainment
  and information on their wireless handsets via
  mobile broadcast technologies such as DVB-H and
  MediaFLO.
• A recent ABI Research study forecasts that in
  2011, mobile TV services will have 514 million
  subscribers worldwide. Of that total, 460 million
  will be subscribers to broadcast services

Source 9/21/06 ABI Research Press Release
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Computer Screens

• About one in ten U.S. online consumers watches
  television broadcasts online.
• Respondents mostly were still watching as much TV
  on the TV as they had been, despite adding some
  online viewing to the mix.
• Three out of four online views said their
  traditional TV-viewing habits havent changed, a
  small percentage said it had decreased and a
  smaller number said it had increased.
• More than two-thirds of online consumers log on
  daily for entertainment purposes, and 16 seek
  entertainment online several times per week.
  About one-third of households that watch TV
  online contain multiple viewers.
• News broadcasts are the most popular go-to
  content online, drawing 62 of online news
  viewers, followed by entertainment viewing
  (nearly 50).
• Other popular content missed favorite shows
  previews sports and seeing entire episodes of
  shows, each drawing a yes vote from more than 25
  of online TV viewers.

Source 10/25/06 Multichannel Newswire
(Conference Boards Consumer Internet Barometer
survey)
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Computer Screens

• Americans ages 18-34 are roughly twice as likely
  to have downloaded television programs from the
  Web as the population at large, according to a
  study by research firm Ipsos Insight.
• Based on its survey of 1,143 Web users, Ipsos
  estimates that 10 of US adults under 35 have
  downloaded a show, compared to 5 of the overall
  population. Downloading is even more prevalent
  among 18-24 year-olds, as 14 of that group has
  downloaded a show.
• Although the overall proportion of TV downloaders
  is small, its growing quickly. Last year, just
  2 of the population at large had downloaded TV
  shows, as did 5 of 18-34 year-olds.

Source 9/8/06 Media Post Publications
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Computer Screens

• eMarketer projects that ad revenue from online
  video will reach 775 million in 2007.
• By 2010, online video ad spending will soar to
  2.9 billion or 11.5 of all dollars going to
  online ads.
• eMarketer predicts that spending for online video
  ads will grow by at least 45 every year through
  at least 2010, ad spending in particular will
  boom next year with a growth rate of 89.
• By comparison, total online ad spending will
  increase 15.1 next year and rich media spending
  will increase 40.7.

Source 11/7/06 MediaPost Publications
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Computer Screens

• Internet video services will generate over 1.7
  billion in revenues by 2010, according to IDC.
• The market for Internet video services began its
  dramatic acceleration in 2005 as content owners
  started to experiment with digital distribution
  as a way to complement and enhance their existing
  business models and to stem illegal P2P file
  sharing and piracy.
• In particular, the television networks decision
  to offer episodes from new shows as well as old
  sparked significant interest in Internet video.
• IDC expects content owners will migrate toward
  three basic service types
• Advertising-based services will remain the
  dominant type of Internet video service.
• A la carte services, buoyed by consumer
  familiarity with iTunes, will grow dramatically
  over the next 2-3 years.
• Subscription-based services will experience
  steady growth throughout the forecast period,
  enhanced somewhat by the emergence of home
  networking solutions.

Source 4/19/06 Center for Media Research
Premium content driving Internet video growth
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Television

• VOD is now in 25 million digital cable homes, and
  60 of digital cable subscribers have used VOD,
  up from 25 two years ago. About 12 of
  households in the US now have a DVR, up from 3
  just two years ago. However, the overall impact
  of DVRs and VOD on US television remains small.
• Leichtman Research Group (LRG) estimates that
  less than 4 of all TV viewing in the US today is
  of recorded DVR programs or on-Demand viewing
  up from about 2 a year ago.
• The number of DVR and VOD users have
  significantly increased in recent years.
• The mean reported number of programs recorded
  each week in DVR households increased by 23 in
  the past year, to 11.3 programs recorded per
  week.
• Among cable VOD users, the reported mean number
  of total on-Demand programs and movies ordered
  per week increased by 33 in the past year, to
  4.8 per week.

More
Source 11/1/06 Center for Media Research
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Television

• Premium-on-Demand programs and movies account for
  half of all reported on-Demand usage.
• 62 of DVR subscribers, and 64 of VOD users, say
  they usually watch recorded or on-Demand programs
  when there is nothing on they want to watch.
• On-demand TV services have made major strides in
  the past year, and these trends will continue.
• By the end of 2010, over 50 million households
  will have a DVR and about 42 million will have
  access to VOD from their cable provider.
• Despite the growth in users and usage of DVRs and
  VOD, these services still represent a very small
  portion of all TV viewing in the US.

Source 11/1/06 Center for Media Research
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Television

• Although ratings have fallen for many top reality
  shows, a new survey shows that VOD users are 27
  more likely than the general public to watch
  reality programs.
• Behind the reality genre, VOD users were more
  likely to view music videos (24), news magazines
  (22), science fiction (21) and dramas (18).
• The Scarborough report confirmed some widely held
  beliefs about the demographics of VOD users that
  they tend to skew younger and more upscale, and
  are more tech-savvy.
• VOD users are 27 more likely to be in the 18-24
  age group, and more than twice as likely to have
  annual household incomes of 150,000.
• They are also 50 more likely than the general
  public to spend 20 hours online each week.

Source 6/29/06 Media Post Publications
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Thank You