Advanced Television

TV advertising will survive the rise of VOD

December 22, 2009

The rise of video-on-demand viewing and online TV catch-up services will not kill the advertising-funded business models of traditional TV broadcasters over the next decade, according to a report by Enders Analysis.

The research company said that despite the concern about viewing figures for watching TV via computers, 99 per cent of total viewing of video content is still through the TV set. About 90 per cent of this is still live TV viewing.

By 2020, Enders Analysis forecasts that the share of video on demand viewing via TV sets or on computers will only grow to between 5 per cent to 10 per cent of all viewing “and more likely towards the lower end”. Among the 15- to 24-year-old digital-savvy demographic, the viewing share may be as high as 30 per cent, the report admits, although the overall national average will be 5 per cent of TV viewing.

“At these levels, and after taking into account the lower tolerance of interruptive advertising in on-demand programming, non-linear VOD services are unlikely to have a significant impact on commercial spot advertising revenues during the next 10 years,” the report concluded. “The traditional linear broadcast TV model continues to work well in terms of reliability, simplicity, ease of choice and ability to deliver popular programming with mass appeal.”

Enders said that the hype over numbers of views of shows watched on services such as the BBC iPlayer had “is out of proportion to the actual audiences”, which has in turn skewed the view of the popularity of such services. “On-demand consumption is, of course, growing steadily, though not at a rocket pace,” the report added. “And we expect growth rates to be dampened over the next five years by the continuing rapid mass-market adoption of devices with personal video recorder functionality. Most VOD consumption is of recent and popular programmes aired on linear TV, with little evidence of significant appetite for archive and other long-tail content.”

Categories: Advertising, Research, Research Library, VOD