Video On (& On & On & On) Demand

Rhys McLachlan, head of broadcast implementation at Mediacom, looks at the phenomenal growth of video on demand and how it has helped change the broadcast landscape….

Since YouTube demonstrated to an eager audience, back in the heady Web2.0 days of 2005, that video via the internet was a scaleable and consumer friendly proposition, we have witnessed phenomenal growth in both online videos served and consumer appetite for this media.

The UK media landscape was rapidly populated with a variety of publishers offering a mix of user-generated content, professionally produced video and a liberal serving of illegally uploaded films, TV shows and music videos.

Under the intense scrutiny of lawyers, and the strict application of digital rights management (DRM), online video has experienced an accelerated maturation to a point where in only four years it now exists as an established media channel, present on communications plans on its own merits.

As at November 2008, streams of professionally produced, legitimate video-on-demand across all platforms and including the BBC’s iPlayer, totalled some 118m per month. Before we get carried away, this ought to be placed into some sort of context, this is no more than the monthly audience achieved by the conventional broadcast stream of the channel Film4 +1, however this audience can hardly be disregarded as having no substance and therefore it is of high value to advertisers and agencies.

The broadcasting community has fully embraced the new opportunity to distribute their content and led mainly by the BBC’s rampant promotion of their iPlayer service, a UK consumer can now largely self schedule their TV viewing, assuming of course that they’re content to huddle round a broadband connected laptop or PC.

Whilst the main players from the broadcasting family dominate the headlines and attract the lions share of both viewing and therefore commercial investment, we ought to be mindful that on the periphery there are any number of well developed propositions. Increasingly these smaller, more agile, operators are building relationships with producers and commissioners and serving a consumer need to provide video content for communities that are not adequately served by the current mainstream offerings. With increased venture capital investment and a more even-handed distribution of advertising revenue, these alternative publishers could well represent a significant share of the market in the mid to long term.

Many in the industry were taken aback by the Competition Commission’s decision to curtail the activities of Project Kangaroo, the online video cooperative from ITV, BBC Worldwide and Channel 4. The ruling determined that the joint venture would qualify as anti-competitive and therefore would stifle progress and development in the market. Whilst on paper this may have appeared to have been the case, for many industry experts, the compelling attraction of the proposition was the promise of a singular destination for professionally produced content, and, critically for consumers, a single operating platform, rather than the disparate systems currently employed by the BBC, ITV.com and 4oD.

Reassuringly, the concept of Kangaroo is alive and well, and under the auspices of Project Canvas (shouldn’t that be ‘Wallaby’?) the BBC, ITV.com and BT are collaborating on an initiative which – albeit with Competition Commission concerns yet to be alleviated – promises to drive forward development in the online video industry.

Despite the medium being only four years old, on the near horizon we’re about to witness a seismic shift which will redefine what we know as VOD.

Since the birth of the medium, the puzzle which has perplexed many is that of how to close the last six foot. That is, how do we take this medium full circle and provide the wealth of online served video content back onto our 42 inch HD plasma screens.

There is, in the UK at least, a clear and substantial appetite for online video, but a real reticence to connect our broadband enabled laptops to our TV sets. MediaCom Research has revealed that as of mid-2008, of the 75% of broadband enabled homes less than 8% had ever connected their laptop to their TV set in order to enjoy online served video. The demonstration of wi-fi enabled TV sets, as demod at this years CES exhibition in Las Vegas, helps to solve this conundrum. These sets, due to enter production towards the back end of this year, will bring the wealth of entertainment available online directly to your TV screen, no wires required. In addition, there’s been a real buzz in the US market around the collaboration between NetFlix (the US LoveFilm if you like) and the set-top box manufacturer, Roku, which will enable NetFlix subscribers to view the vast library of films available on the service directly to their TV sets via their broadband enabled set top box.

Closer to home, the provision of direct-to-TV VOD services has been a remarkable success for Virgin cable, with a claimed 52m streams delivered per month at the end of 2008.

The digital satellite broadcaster, Sky, has via its ‘AnyTime’ service been active in the TV-VOD space for some time and has developed an consumer friendly EPG-based service for Sky+ subscribers that has seen it rise to be viewed as the sixth most popular ‘channel’ in these homes.

Recent announcements from Sky, regarding their plans for the development of their broadband served ‘SkyPlayer’ option suggest that even Sky, with their 9.3m digital satellite homes recognise that the broadcast game is changing.

We’d do well to acknowledge that the Murdochs rarely call it wrong.