"Video on demand is going to play a major role in how people
consume video going forward," said Alan Wurtzel, president-media
and research development at NBC Universal.
For TV execs such as Mr. Wurtzel, that would be great news, as
the DVR remains a destructive force for advertisers and media
outlets, the latest evidence of that being TV networks' full-on
legal assault against Dish Network's "Hopper" device that allows
viewers to automatically skip ads on all TV programs they
record.
But DVR adoption in U.S. homes has begun to plateau, and it's
already been surpassed by VOD use. Consumer behavior is shifting,
too, as cable and satellite distributors have broadened their VOD
offerings -- and started to promote them. These days, subscribers
can get movies, how-to videos and -- perhaps most important --
current episodes of programs from CBS, NBC, ABC, Fox, FX and AMC on
demand; they no longer need a DVR to watch most of their favorite
sitcoms and dramas when they wish. This behavior is further
encouraged by the streaming-video subscription services, including
Netflix, Amazon and Hulu Plus , available via internet-connected
TVs. Younger consumers may never know a day when they had to "set"
their TV to record a particular show.
Already, VOD viewership of CBS programs "is a relatively
significant amount and it is growing," said David Poltrack, chief
research officer of CBS Corp. Even TiVo, which sparked the DVR
revolution, has moved into new areas, such as video search, said
Tara Maitra, senior VP-general manager of content and media sales
for TiVo.
"The reality is consumers don't really care" how they get access
to programming, she said, so long as they can do it on their
terms.
TV networks have good reason to push video on demand. In
exchange for the opportunity to show TV's most highly rated
programs on demand, cable companies and other distributors have in
some cases agreed to disable a viewer's ability to fast-forward. In
other words, TV viewers can't escape the ads when they watch via
VOD. Some networks have already begun to tally VOD viewership in
the schedules they devise for advertisers.
"We like VOD," said NBC's Mr. Wurtzel. "Not only can you control
in some instances commercial skipping, but you can also control how
long [a program] stays available and when it goes down." In the
case of DVR viewing, "we have no control over the content."
"Fast-forwarding of ads will likely decline," predicted Michael
Bologna, managing partner and director-emerging communications at
Group M, the large ad-buying arm of WPP. To get their shows for
free and as they wish, unavoidable ads could be the price consumers
must pay.
