Philadelphia -- Cable's free video-on-demand services are an
increasingly critical component that reinforces the value of the TV
subscription, according to a panel of industry executives here at Multichannel
News/B&C's On Demand Summit 2.0.
For Rogers
Communications, offering free VOD is a key part of "sustaining and
nurturing our customer relationships," said David Purdy, vice president
of television and video product management -- particularly for those
under 25, who see cable services as less relevant than older consumers.
The
Toronto-based cable operator, the largest MSO in Canada, is offering
every World Cup match on TV, mobile and broadband on-demand so customers
should "not miss a single goal, a single red card," Purdy said.
"Everything
we do at Rogers is about extending the existing customer relationship,"
he said.
Rogers generates $1.8 billion in television
subscriptions annually, but less than $100 million of that is from
transactional revenue, including VOD and pay-per-view events, Purdy
noted. "The bulk of the future revenue will continue to be
subscriptions," he said, and free VOD adds more value to those.
Bob
Watson, Time Warner Cable's vice president of programming and new
business development, agreed that free video-on-demand is a hugely
popular element of the video subscription.
"People are looking for
more value and they are getting that from the type of programming," he
said. Time Warner Cable offers about 10,000 hours of VOD, which is mix
of transactional, subscription and free content.
Univision
Communications, for its part, is gearing up a huge VOD push for the
World Cup, making hundreds of hours of coverage available free on-demand
24 hours after the matches appear on linear. "For us it's all about
introducing VOD to our audience pretty much for the first time," said
Tonia O'Connor, executive vice president of distribution sales and
marketing.
At the same time, there's a prime opportunity for cable
to increase revenue transactional VOD for movies, especially as the
physical movie-rental stores are closing, said Alex Fragen, Summit
Entertainment's president of domestic television distribution.
"If
the customer wants to watch something it needs to be available," he
said.
Added Purdy, "There's a huge community out there that will
never go to the cinema. But they're willing to pay a premium for that
movie day-and-date... They'll pay multiples over what they currently pay
for VOD."
But the panelists also said VOD interfaces remain a
barrier to wider usage.
"The challenges are navigation," Sandy
Wax, president and general manager of PBS Kids Sprout. "We need to think
about, how do we think about this holistically instead of these bits
and pieces?"
Watson said cable VOD services have been set aside in
"artificially defined" areas that are based on the technology.
"Customers don't care about that - forget about the walls whether it's
linear, on-demand or on their DVR."
Cable operators should be
providing an "E-ZPass" for customers to watch any video they want,
Watson said, referring to the automated highway-toll payment system the
East Coast: "Just make it available to me."
The challenge is to
make rights holders understand the benefits of making their content
across multiple platforms, to provide that seamless experience, Purdy
said. "We should begin every conversation with, ‘What do customers
expect today?'" he said. "If you're slow to the market that's when you
see the bleed to piracy."
Purdy, in describing Rogers' World Cup
multiplatform play, described the service as covering the "4A's": any
content, anytime, anywhere, any device.
Watson later commented,
"Since the Canadians took the 4A's, I'll say Time Warner Cable is
delivering video to the ‘4C's'": cable, cell phone, computer and car. To
which Purdy replied, "I like the 4C's better, in fact."
The
panel, "Programming for Demanding Audiences," was moderated by Multichannel
News programming editor Tom Umstead.
