VOD-Next

In my previous post I linked to an article about telecoms delivering cable channels directly to your TV. That's a great idea if you want to watch something live.

But what's next?

Personally, I think we'll see advances in VOD.

Don't we already have VOD?

Yes and no. Premium cable channels already provide VOD. Think HBO and "The Sopranos." Some networks provide VOD news coverage. Think "ABC News."

I reckon the next development will be for shows like "Lost" and "Desperate Housewives." Network series with avid audiences that have access to VOD. And the main challenge will be to provide VOD without losing the watercooler effect for these shows.

Here's one concept of how to make VOD work for watercooler shows. ABC gets revenue from commercials to partially pay production costs. If you stop watching commercials, then ad revenue goes down. ABC needs to find a way to release "Lost" at 9PM on Wednesday and entice a large audience to watch it in real time (with commercials). I think ABC will start bribing audiences with monetary contests--watch this show live and you'll be entered in a year-end drawing where one viewer will win $5 million. Every week you watch the show live, you win an additional entry in the drawing. If you didn't watch the show live, you can still win an entry into the drawing--watch the show on ABC-VOD sometime within 12 hours of its release time and do not fast-forward through the commercials. You can access the show on ABC-VOD anytime after that, but you will not win an entry. After one week, the show is taken off ABC-VOD.

I want to highlight three features of this concept.

First of all, the network provides enough incentive for the audience to watch the show the night it's released and watch the commercials. They improve the watercooler effect since more people will watch as long as they can watch at their convenience without decreasing ad revenue.

Secondly, the networks can still air repeats and sell DVDs if they don't keep shows on VOD forever. The purpose of VOD in this case is to allow the audience to see the show at its convenience. By keeping the show on VOD for one week, you entice the audience to watch it at some point before the next episode airs.

Lastly, the Nielsen Media Research Co. will also be happy with the cutoff date for viewing since they can still provide weekly ratings and provide new stats about viewing habits (households watching on 1st day, 2nd day, etc.). New stats means more money.