|Digital cable subscribers with on-demand services spend 13% of their total TV time in an average week watching VOD.
The results of the study, which called VOD cableâ€™s â€śtrump card,â€ť are an indication that if programmers build on-demand programs, consumers will come. And if programmers donâ€™t create on-demand viewing options, they risk losing viewing share to those that do.
Consumers want free VOD
While most VOD remains advertising free, there is clear consumer demand for such an arrangement. An earlier joint study by Horowitz and Points North Group indicated consumers prefer free, ad-supported on-demand TV programs versus paying $1.99 for programs by a three-to-one margin. The $1.99 price point has become standard for on-demand TV programs, thanks to a series of deals by the major broadcast networks and companies such as Comcast, DirecTV, iTunes and Google Video.
The latest Horowitz study also reports that more than half of the cable customers with free VOD use the service on a weekly basis, with two in 10 using it daily. Consumers with movies on demand watch an average of 1.5 movies a month and more than one-quarter watch two or more in the average month. Additionally, more than three-quarters of digital cable households have VOD service, and VOD remains a key driver to customer satisfaction.
Yet despite the link between VOD and cable satisfaction, the study found that when consumers were asked, unaided, what the biggest differences are between cable and satellite, virtually none of the consumers surveyed mentioned VOD services, indicating that cable companies need to do a better job of communicating the value of VOD in digital cable subscriptions. Because of their two-way digital infrastructure, cable companies can offer thousands of hours of VOD programming while satellite companies remain fairly limited in the amount of on-demand hours they can push to their customersâ€™ set top boxes.