Thursday, 11 July 2013

Video on Demand Money bag for the MSOs

Video on demand (VOD) is system which allow users to select and watch/listen to video or audio content on demand. IPTV technology is often used to bring video on demand to televisions and personal computers. Catch up TV is the latest form of video on demand. The technology is also used a value addition by Cable Operators. 
Television VOD systems either stream content through a set-top box, a computer or other device, allowing viewing in real time, or download it to a device such as a computer, digital video recorder (also called a personal video recorder) or portable media player for viewing at any time. The majority of cable- and telco-based television providers offer both VOD streaming, including pay-per-view and free content, whereby a user buys or selects a movie or television program and it begins to play on the television set almost instantaneously, or downloading to a DVR rented from the provider, or downloaded onto a PC, for viewing in the future. Internet television, using the Internet, is an increasingly popular form of video on demand.

Developing VOD required extensive negotiations to identify a financial model that would serve both content creators and cable providers while providing desirable content for viewers. Key factors identified for determining the economic viability of the VOD model include VOD movie buy rates, Hollywood/Bollywood  content and cable operator revenue shares.
Cable providers in developed markets offered VOD as part of digital subscription packages, which by 2005, primarily allowed cable subscribers to only access an on-demand version of content that was already provided in linear distribution. Included in these packages were "extras" and "bonus footage" rather than full episodes of television shows.

VOD – a real value addition
With cable networks migrating to Digital, VOD will be a major attraction for subscribers to stick to a cable service and a major source of revenue for MSOs/Cable operators. Operators can provide all kinds of content including local content, movies of all languages, video programmes and archives of sporting events and TV serials.
This can become a great monetizing opportunity for the MSOs/Cable operators. Not only this it will also speed up the process of digitisation as it provides additional income to  cable operators and MSOs provided a better revenue share formula is worked out.
DTH companies are already providing video on demand service. This VOD on cable can also enable MSOs to complete with DTH operators. Pay TV Market is based on bouquets and not on other assets. Video on demand can create another in pay TV regime. The cable industry has dominated the pay-TV market since the early nineties but is now facing competition from DTH and IPTV. DTH seems to be growing strong in India and is likely to capture 40% of the total pay-TV subscriber base by 2014, Overall growth of cable subscribers during the forecasted period is slated to be 15% The growth of IPTV is likely to remain slow during the forecasted period, owing to lower broadband penetration in the country.
Already DTH companies are providing Video-on-Demand services to their subscribers. Tata Sky has many videos in their service that includes movies, educational videos and hobbies. Airtel Digital TV, the DTH arm of Airtel, has announced Video On Demand last month that will allow customers to connect their set top boxes (STB) to their broadband connection and download TV content from an on-demand video library. Currently the service is available in Mumbai, Kolkata, Chennai, NCR, Pune, Hyderabad and Bangalore. However, the company plans to expand the service in other cities too. Dish TV is also providing Movies on Demand.

IP Streaming is considered best for a VoD service
Video on demand allows a user to re-broadcast an event in real time on the Internet. This capability is one of the most unique and exciting applications of streaming media technology. Only Streaming Media enabled servers allow a user to do a video on demand with high quality and reliability on the Internet.
Live video streaming is an incredibly powerful tool, delivering content in an exciting and dynamic format. It comes with prestige and a feeling of exclusivity, knowing someone is among the first to witness it. However, sometimes live coverage just can't capture all of a desired audience. Different time zones, conflicts in schedules, and other issues are barriers to people enjoying live streaming Video-on-demand content shatters this barrier..
Cable VoD – a great opportunity
Cable VoD is delivered without any delay and thus is not “streaming media”. Streaming media typically has series of “buffering” delays in delivery, usually there to overcome memory limitations in personal computers. Second VoD is viewed on a television set , and delivered via” set-top-box”. The television viewing experience  is essential not only for video quality, but because of the mindset and behavior of the viewer when, sitting infront of a television versus a personal computer or any other viewing experience. Third, all media(video, audio, and graphics) originates remotely but are delivered in such a way the viewer is unaware as of their location of origin. They see it immediately or “on demand .
Providing VOD services requires additional software added in the TV “ set-top-box” that helps the viewer interact with the media. As a result the media changes and adapts depending on the viewer’s response or behaviour. Thus one has to pay more for this premium service.
In India the technology is yet to flourish as broadband penetration is very low and cable has just started its migration to digital. But with phase I and II of digitization completed, we expect many MSOs will add VoD in their service to increase their ARPUs. There is no dearth of content in India. Since there are more than 800 satellite channels and flourishing film industry in all parts of India, we have every type of content in every state. Thus this is the right time for the MSOs to start planning their VoD service and stop the subscriber churn in their network.   


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