By: Rob Young
Ask six people in our business what the term Video on Demand means and you’ll get six different answers. Ask six people in the TV business how many Canadians tune into a VOD cable channel and you’ll get six different answers. Ask six media forecasters why VOD is important to the future of the TV industry and, you know, you’ll get six different answers. “Video on Demand” is in desperate need of clarification.
Thankfully some degree of clarity arrived this week and more clarity is less than a month away.
Like the parable of the six blind men feeling and attempting to describe an elephant, different sectors of our media industry define VOD from very divergent vantage points, blinkered by each industry’s vantage point. Little empirical data has existed to help deal with our myopia.
In the broadest sense of the term, VOD means any online or offline video content accessed by consumers at the consumers’ command. In the narrowest sense, reflecting the TV industry’s point of view, VOD is defined as recently aired TV episodes that a viewer can access from the broadcast distribution system’s On Demand portal and the broadcaster’s website.
This is the reason why it is so difficult to discuss, define, measure and understand why VOD matters. The vagueness of VOD results in headlines like this one from the September ’15 Ericsson’s 2015 ConsumerLab TV & Media Report: “More than one-third of TV viewing done on-demand.”
On the other hand, guesses from broadcasters and TV buyers include estimates like this: 3% of a TV program’s real audience IS viewed via video on demand.
Quantification of VOD must always come with qualification. The MTM Survey, Spring 2015, can shed some light on the subject. MTM reports that 18% of adults over 18+ in Canada used VOD over the past month and the proportion drops to 13% when we refer to only TV programming accessed through VOD. But these numbers need to be qualified. The question is asked only of those who are cable or IPTV subscribers and so this is the narrower definition. The VOD usage penetration proportions bounce about depending on age and language. Netflix has very high sub proportions especially in Anglo Canada. Shomi and Crave awareness is high but their sub proportions are minimal.
So VOD usage is very high and very low depending how you decide to define VOD evidenced by the following VOD infographic:
Numeris and the TV industry have also been wrestling with the issue of definition (using the narrowest one) for a few years now. Some time ago “On Demand” cable/IPTV channels carried TV reruns complete with original commercial messages which caused havoc with talent cycles. And so the commercials were jettisoned. Since then several broadcasters have injected new special “Layer 4” PPM codes in the TV programs available on the VOD channels and websites and Numeris is capturing and identifying these audiences as VOD audiences separate from the audiences tuned into the live/playback airings of the TV program.
This week Numeris released an “On-Demand Measurement Report” which finally quantifies VOD audiences for sitcom, drama and reality TV programs that aired on Shaw, Rogers and Bell conventional stations between January and June 2015. The report found that the on-demand average-minute audiences accounted for around 5% of the total audience for drama and reality TV program genres and 10% on demand audience composition for sitcoms.
In October 2015, Numeris will be releasing a more detailed look at September 2015 VOD audience results. Some degree of clarity has arrived and more clarity is on its way.
Does any of this matter? Yes indeed. A TV program’s total audience comes from a number of different sources nowadays. The live airing attracts audience and that’s currently measured and reported. A 7-day replay audience exists and that audience is also captured and reported. The 8-to-28-day replay audiences are captured but not reported. VOD audiences are being captured and will be reported next month. Significant TV audience, which has spilled along the way, needs to be mopped up and placed back in the currency bucket.
Perhaps more importantly, VOD possess the unique characteristic of being able to respond to an individual’s (hence the word “demand”) viewing behavior. If the cable company has the technology to serve a specific commercial to that individual (dynamic ad serving) then a new, premium commercial service is born and the TV industry could certainly use a new premium revenue stream right now.
But perhaps even more importantly, dynamically ad-served VOD is a harbinger for a different kind of TV business model that functions in an IPTV environment and allows all viewers to access all TV content on demand complete with dynamic ad serving. That’s called addressable TV.
And that really is the elephant in the room.
Rob Young is SVP, director of insights and analytics at PHD Canada
