Video-on-Demand Will Generate Revenues Of$2 Billion In 2005.
June 12, 2001
Video-on-demand (VOD) has long been seen as the “killer application” for interactive TV, but expensive set-top box requirements and stratospheric costs per stream have delayed its long-awaited rollout. This year, equipment costs, plant upgrades, and digital set-top box penetration have finally begun to achieve the critical mass required for commercial deployment. Based on this, the Yankee Group believes that VOD will generate revenues of more than $65 million by year-end 2001, and will reach $1.98 billion by year-end 2005.
Year VOD Revenues (in Billions)
2001 – 0.07
2002 – 0.42
2003 – 0.97
2004 – 1.43
2005 – 1.98
The Yankee Group Report, “Video-on-Demand: How Soon Is Now?” notes that despite limited content availability (resulting from the major studios’ reluctance to release new titles) and challenging bandwidth requirements for VOD, cable operators are moving forward with wide deployments of the much anticipated—and much delayed—VOD service.
“A host of services have been bundled under the term ‘interactive TV,’ and this has resulted in a lack of clarity regarding both the deployment and the practicality of interactive TV,” said Adi Kishore, analyst with the Yankee Group’s Media & Entertainment Strategies Planning Service. “Now we are beginning to see a focus on individual iTV services by MSOs, and a decision to selectively deploy those that offer a clear revenue stream, reduce subscriber churn, and are difficult or impossible for satellite operators to match. Video-on-demand best fulfills these criteria, and will be rapidly deployed by cable operators over the next two years,” Kishore said.
For more information at http://www.yankeegroup.com
