VOD Growing, But Lags Behind DVR Use

While video on demand (VOD) usage via cable operators is growing at a healthy rate, it still lags behind DVR use and web video adoption. I say, if VOD systems on other operators work similarly to what Comcast (s CMSCA) offers, they will continue to lag until they fix some fundamental issues.

First, the good news for VOD usage: From the beginning of 2007 to the end of 2008, research firm Rentrak saw a 21 percent jump in VOD orders and an 11 percent bump in the number of people using the platform. Further, roughly half of those viewers who can access VOD use it each month, ordering about 18 programs a month.

But on the other hand, as Multichannel News reports, Horowitz Associates finds VOD lagging live television and DVR viewing:

“If you look at each demographic, DVR usage is 30 percent to 50 percent higher than VOD,” said Howard Horowitz, the research firm’s president. “VOD has a lot of cable business momentum driving it into consumer homes and consumers are responding, but not in an overwhelming kind of way. It is another useful, very convenient device, but not a killer app.”

In the case of Comcast (which I subscribe to), a number of small tweaks could be made that would probably spur a jump in adoption. Robert Seidman over at TV by the Numbers points out one of the biggies, the lack of HD VOD:

Many of the programs I watch on TBS, SyFy, USA and HBO are actually available on demand, but are not available in high definition. Because the quality of video is so much better in high definition, I wind up recording and watching a lot more shows via DVR than I would if those same shows were available in high definition on the On Demand service.

Aside from the picture quality, the picture size is shrunk to fit the widescreen in a 4:3 box. This puts a big black border around the picture and scales the image down so you’re only using a fraction of that big screen you paid for.

Seidman also writes about the complicated user interface when watching VOD content. There are far too many buttons to push, and if you’re chugging through season 4 of Entourage, you have to navigate back and forth between menus in an irritating fashion.

Another roadblock to VOD adoption is that ads have crept into VOD content. Granted, these ads appear during free content — so some trade-off is to be expected for not paying. (Everyone needs to make their money back somehow.) But ads still interrupt the movie experience and make watching a movie more mundane, like you’re catching it on TV.

Maybe the ads wouldn’t be such a hassle if the fast-forward wasn’t crippled. When using my DVR, I can fast-forward up to five times faster to zip through commercials or content I may have seen. With VOD, the ffwd is reduced to just 2x, drastically slowing down the ability to zoom through slow parts.

At the end of the day, perhaps VOD lags behind DVR use because of control. With my DVR, I know when I’ll have a program available, the quality I’ll watch it in, how long I’ll be able to keep it, and I’ll command the speed at which I watch it. With VOD, the operator dictates those conditions.