Premium services will further drive the growth of VOD equipment, a report from research firm ABI Research said.
ABI Research further said premium VOD is one of a handful of new services, along with advanced advertising and catch-up TV services, which will drive 20% growth in the worldwide market for VOD equipment, from $493 million in 2010 to $591 million in 2016.
The research firm further said pay TV providers are preparing to offer viewers premium VOD offerings and new releases expected to cost $25-$30 and showing about two months after a movie’s theater premiere and two months before release to DVD, premium channels (such as HBO), and video services (such as Netflix).
While expensive, the total cost of premium VOD is designed to be less than that of theater tickets and a babysitter. Some customers may prefer the flexibility to stay at home while watching more recent content. For the time, however, this offering is expected to add some marginal revenue for content owners and operators without significantly altering the content revenue equations.
“Premium VOD requires close cooperation of VOD server and content protection vendors,” said Sam Rosen, senior analyst. “In the case of DirecTV’s premium VOD launch, Home Premiere, SeaChange worked to integrate watermarking technology by Civolution to help persuade Hollywood to release premium content to video on demand (VOD) platforms.”
Operators are also implementing advanced advertising solutions to help justify upgrades to their VOD equipment. Comcast recently announced they are using dynamic pre-roll and post-roll ads for VOD content in selected markets, with a full rollout expected by 2012.