How valuable is VOD to broadcasters? Not at all, according to Claire Enders, Enders Analysis‘ grim reaper in chief, who says that online video “is not a revenue stream of any significance for anyone” despite industry hopes it would by now be a major contributor.
Speaking at the Westminster eForum on Tuesday, she predicted VOD will generate £200 million a year in “direct revenue” and another £100 million a year in advertising by 2013. That doesn’t sound too bad, but “this is probably one of the most disappointing results, given the expectations and the hype at the start of the decade,” she said.
Whereas at the start of the decade, many believed VOD be a key driver of broadcast revenue, “I think we can say with certainty that that has not occurred and that it will not occur in this decade,” says Enders. She quoted a — unnamed — TV producer who in 2003 declared that BT (NYSE: BT) would be “the number one commissioner of programmes in the independent sector” by 2010.
So what is happening? A reversion towards linear: Enders says the adoption of PVRs and HD TV as the public gear up for the digital switchover in 2012 has brought people — even social networking youngsters — back to the main TV screen. “Last year was the first time in 20 years that family usage increased and second (TV) set usage saw a steep decline,” she said.
Enders points to Joost’s shift from VOD portal to white label content distributor as proof that the monetisation of PC video viewing is “immensely problematic”, and estimates that PC viewing accounts for just three percent of home viewing in the UK.
For Enders, the companies that will get rewards from VOD are Google (NSDQ: GOOG) and the BBC — both of which either don’t need to make revenue or use their VOD platform to build reach. She does, however, admit that VOD has some advantages for commercial players like Virgin Media (NSDQ: VMED) by helping to reduce churn.
See Enders’ previous pronouncements on the death of local newspapers and a bloodbath in media jobs.
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