Time for consumers to thin out crowded VOD field

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Video on demand may be hot, but the question is whether all these plays will fly.

With new offerings such as Google's Video Store launching almost daily to join iTunes downloads and cable TV programming available with the click of a remote, it's difficult to keep up with what is available, much less which concept will succeed.

One of the reasons iTunes does well is "the model is open and easily understood," said Richard Doherty, research director of technology at market-research firm Envisioneering Group. "With Apple, you pay to own. The Apple message is clear." Indeed, the concept of videos that can be downloaded onto video-enabled iPods took off immediately when it was introduced last October. One million music videos were downloaded in the first 20 days.

Google's Video Store offerings, by comparison, are all over the map, with some videos to buy, some to rent, some free. Some have copyright protection, others don't. Yahoo's model, meanwhile, relies on advertising for its revenue, while the cable companies' are subscription-based.

"I don't think any of the deal structures you are seeing today reflect the end game of how media is going to look in 10 or 15 years," said Adam Gerber, VP-ad products and strategy at Brightcove, a Cambridge, Mass.-based company that provides infrastructure to distribute ad- and subscription-supported video over the Internet.

Among models that are sustained through advertising, one question is how content providers and distribution platforms will charge advertisers. The first forays into figuring this out will occur at the next TV upfront.

And however on-demand content evolves, no video-to-go will ever replace TV. "There's an entrenched legacy business model that still works, that still delivers, for the most part, what consumers want," Mr. Gerber said.

Still, VOD must become viable based on what the plugged-in consumer now expects. Said John Battelle, founder of the Industry Standard and Wired magazine: "The [offerings] that are going to win are those that can give me personal control ... and allow me to share it with others, which is really important because that's what's going to make [the concept] catch on."

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