Video On Demand Must Compete With DVD And The Economic Downturn

DVD is still Europeans' preferred medium for consuming digital video content on demand. Video product strategies must operate within the context of DVD's current market dominance. Yet TV-based video-on-demand (VOD) uptake is growing fast; roughly 35% of European TV-based-VOD-enabled households use it monthly. As it places the TV set at the heart of the VOD experience and matches the DVD rental experience in many ways, TV-based VOD has the potential to grow at the expense of DVD viewing. However, in the medium term, TV-based VOD will continue to face tough competition from retail DVDs, whose average price across Europe has fallen by 25% since 2003. With the additional threat of increased video piracy due to economic turmoil, TV-based-VOD service providers need to strengthen the consumer experience and define relevant pricing strategies if they wish to boost consumer interest. Content merchandising as well as better integration with the linear TV experience will also help raise consumer awareness. All this will only be possible if providers can sign more flexible licensing agreements with the rights holders.