Electronic sell-through is the future of VOD

Industry strategies are shifting to reflect the new realities of the on-demand market
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The download-to-own business model being pioneered on the audio side by Apple’s $9 billion in 10 years, according to a new study by Adams Media Research (AMR) of Carmel, CA.

Current VOD services are delivering “paltry returns” to Hollywood — especially when compared to the $12.6 billion DVD sell-through business. The researchers noted that several Hollywood studios are already preparing to make the leap to electronic sell-through on the Internet.

Consumer spending on VOD movies totaled less than $400 million in 2004, three years after cable operators began hooking consumers up to on-demand servers in earnest and studios launched the first Internet movie sites. But now industry strategies are shifting to reflect the new realities of the on-demand market.

AMR senior analyst Tom Adams said video-on-demand technology is spreading rapidly, and will become pervasive in the next decade, but turning that technology into a substantial movie market “is going to require a complete reassessment of the industry’s 10-year-old assumptions about VOD.”

That reassessment is detailed in AMR’s new report, “Video-On-Demand: The Future of Media Networks.” Outlined in detail are the various strategies of cable MSOs, satellite providers, and Internet players ranging from Apple and Microsoft to Movielink and Akimbo. The 102-page report analyzes the factors holding down VOD usage to date, the key technology advances that will enable more rapid revenue growth in the decade ahead, and the business strategies that will drive the industry’s key players.

For more information, visit www.adamsmediaresearch.com .

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