Magazine article Marketing

Media Analysis: On a Mission to Make Web TV Pay

Magazine article Marketing

Media Analysis: On a Mission to Make Web TV Pay

Article excerpt

Broadcasters face a struggle to rival the BBC's iPlayer, but also to profit from their VoD offerings.

The success of the BBC's much-lauded iPlayer service has catapulted the phrase 'video-on-demand' (VoD) into the vernacular.

Watching television on the internet is no longer the preserve of the tech-savvy. Such is the speed of uptake that broadcasters are already under pressure to deliver a service that is faster, easier to navigate and more enticing to viewers, the most recent entrant being Five's Demand Five service.

The popularity of the iPlayer has changed the game and left its commercial rivals playing catch-up. The BBC has set an extremely high benchmark, which its rivals will struggle to match without the same investment. The delay of web TV service Kangaroo - a joint venture between Channel 4, ITV and BBC Worldwide - will make the climate even tougher for the current services.

The dilemma facing VoD service providers is that the market is too nascent to yet be treated as a significant revenue stream in its own right.

Broadcasters are obliged to keep up with the times and provide content online for viewers, but few are in a position to lure big-spending advertisers, which, understandably, are adopting a wait-and-see approach until the platform has proven itself.

Last week Five officially rolled out Demand Five, which offers a mixture of free and paid-for shows. The broadcaster's head of strategy Kieran Clifton says the service has achieved early growth, but he expects it will take some time to gather real momentum.

'At the moment we are losing money with the service and, effectively, the more popular it is, the more money we lose, whatever we do with advertising,' he says. 'VoD is a small fraction of our audience right now and we do it because we have to give viewers what they want. It also allows us to learn about what people want to watch and when, and what they will put up with in advertising.'

In the coming years the VoD market will shift again significantly, reverting to being strongly community-based and incorporating more social networking functions, according to Clifton. 'Advertising models will change as well, and there will be an opportunity to make it more targeted and clever,' he adds.

Media agencies, too, are finding it tough to decipher the small volume of research into the VoD market when it comes to deciding whether it's a worthy sell to advertisers. …

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