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All Are Options Now, but Hard to Tell Which Will Prevail

By Published on .

NEW YORK (AdAge.com) -- Video on demand may be hot, but there’s no clear-cut model for it at the moment. Consumers have been bombarded with myriad options to access VOD -- some models are free, others paid either by subscription or a la carte, and you can download content to your iPod, laptop or TV.


audio bug VOD Chart .pdf

With new offerings, such as Google’s Video Store, launching almost daily, it’s difficult to keep up with what is available, much less which concept will succeed. (Download the chart of who's doing what, left.)

One of the reasons Apple's iTunes does well is that 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, it didn't take long for consumers to start downloading videos to their video-enabled iPods -- 1 million music videos were downloaded in the first 20 days after the service was introduced in October.

Buy, rent or get it free
Google’s Video Store offerings, by comparison, are all over the map, with some videos to buy, some to rent and some for free. Some have copyright protection, others don’t. Yahoo’s model, meanwhile, relies on advertising for its revenue, while cable companies, which were among the first to offer VOD services, are subscription-based and available only to their customers.

“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 being asked 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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