Video-On-Demand: Riding The Entertainment Wave

Video-on-Demand (VoD) services allow operators to provide a wide range of
specialized content that consumers can watch at their convenience. Rich media
advertising, personal video recorder (PVR) services and online gaming delivery
are some of the areas that could offer immense monetizing opportunity for the
service providers.

Although VoD services are becoming popular, the actual usage remains quite
low. It has to overcome many challenges to become a mass-market phenomenon.
Bandwidth availability, storage, quality and security of content and cost issues
are the major hindrances in VoD's widespread use. The cost concerns include
cost of equipment, software, and skilled manpower to integrate the components
into a workable business model.

VoD services represent a new opportunity of utilizing the present network infrastructure to deliver video content

What Sets VoD Apart?

VoD systems allow users to select and watch video content over a network as
part of an interactive television system. These services represent a new
opportunity of utilizing the present network infrastructure to deliver video
content. It opens up new avenues for service providers. Through VoD, the
customer can access a video content instantly. PVR also makes it a truly
personalized experience. The technology has all the potential of becoming a
mass-market phenomenon. This has led to dedicated efforts by content developers
and broadcasters to penetrate this market and tap new revenue streams.

Emerging Content and Markets

The first VoD service was launched in Hong Kong in 1990. Though VoD is
mostly concentrated in North America, the recent past has seen it being launched
in Great Britain, Japan, South Korea, and Israel.

The international distributor of Bollywood content, EROS International and
the US broadband VoD download service, Movielink, have struck a deal to make
EROS Bollywood movies available for on-demand delivery over the Internet in June
2006.

In India, Tata Indicom broadband tied up with CNBC TV 18 to launch the VoD
service. This has enabled Tata Indicom subscribers to access CNBC's live as
well as archival content on the Internet.

Service providers are also using IPTV to provide VoD services. BT has decided
to use Microsoft's IPTV solution for its broadband-based VoD products. Rollout
of services is expected in 2006.

Though prices of equipment have come down, integrating different systems and
launching the technology is still a challenge. According to Datamonitor,
increased marketing and greater content availability will help boost interest in
these services, which will ultimately drive the revenue potential of the sector

VoD Over Broadband and 3G Networks

Over IP Video (OIPV) is another advantage which VoD users can enjoy. It
enables VoD to be transmitted over IP. OIPV can stream video content over
broadband connections as well as 3G-enabled telephone networks, both of which
use the IP system to access the Internet. Through this technology, the streaming
VoD can be transmitted to various wireless devices including mobile phones. Many
companies are competing to provide these services to the subscribers. However, a
clear-cut profitable business model is yet to be developed.

With the continued growth of broadband globally, VoD shows immense promise.
The Yankee group estimates that by 2009, VoD will be available to around 36 mn
homes with a CAGR of 23.85% from 2002-09.

The emergence of on-demand TV and PVRs will revolutionize the service
provider business models and the TV viewing experience. The ability of time
shifting and premium services such as fixed IP addresses, guaranteed bandwidth
levels, and easy access to premium VoD content are bound to make it the killer
service of the future. What is needed is a workable and profitable business
model.

Sonia Sharma

sonias@cybermedia.co.in