Analyst: VOD Revolution Could Kick Lumps Out Of TV Income

Sky TV remote

BBC iPlayer may now be pulling a big 100 million views a month – but some other broadcasters have to make money, y’know?

PwC media analyst media David Lancefield says commercial outfits could lose hand-over-fist from linear telly’s coming march to VOD. PwC shared Lancefield’s figures with us…

–By 2014, 15 percent of viewing could shift away to free VOD services from traditional TV. That percentage represented £420 million in ad revenue in 2009.

–There is 10 minutes of advertising for every hour of broadcast TV. But because broadcasters do not think that people will want to sit through that many ads in a catch-up service, VOD might have as little as three minutes of advertising.

–This means that, for VOD to cover the costs of ad revenue lost, it will need to be sold at three times the rate of TV advertising. If VOD ads are sold at the same rate as linear ads, the industry could lose about £280 million.

There are two solutions to this problem: the analysts suggest that advertising will need to become a lot more innovative, and targeted, in order to attract advertisers to the higher rates. Or broadcasters could just charge consumers more to use VOD…

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