Move towards ever better quality of VOD content will be central to operators acquiring new subscribers

As competition for video services continues to grow in Europe operators will offer high definition VOD as a means of standing out from the crowd.

That’s acccording to a report from analysts ABI Research, which says the move from near-VOD to true VOD dramatically increases buy rates.

It believes the next step will be to differentiate even further with HD VOD and greater content choice.
The report says VOD is rapidly becoming a “must-have” feature, leading it to categorise the growth of subscriber levels in the contexts of programming and functionality.

After remaining fairly dormant since its inception in the early 2000s, ABI Research believes this will change largely because the evolution of video consumption has prepped consumer interest for VOD services.

This, combined with the arrival of IPTV operators that offered true VOD from the start, has raised the bar of VOD services.
Paul Lee, ABI Research analyst, said the number of concurrent VOD streams will increase markedly over the next five years.

“The Asia-Pacific region is poised to experience high levels of growth: from 1.66 million VOD streams in 2007 to almost 21 million in 2013,” he said.
“And in total, the global trend toward increased usage of VOD streams will multiply tenfold throughout the years 2007 to 2013, with a compound annual growth rate of nearly 45 per cent.”

Several companies set up their VOD offerings over the past few years with the intention of boosting future subscriber numbers.

Cisco acquired Arroyo for its VOD solutions in August 2006, obtaining customers such as Comcast, Time Warner, and Charter.

While Concurrent has offered one of the most successful VOD platforms for the cable industry – illustrated in 1Q 2008 when the company shipped 50,000 VOD streams, with customers including BrightHouse and Time Warner.

Western Europe will see the strongest surge in VOD users with the largest subscriber base and a slightly higher ARPU than North America, thereby making it the eventual leader in the market,” said Lee.

The ABI Research report, Video on Demand and Ad Insertion Markets, provides an overview of the growth in VOD subscribers, VOD program downloads, VOD servers, and VOD-enabled CPE for CATV, DBS, DTT, and telco TV services.

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