JUPITER RESEARCH REPORTS THAT VIDEO ON DEMAND (VoD) IS A GROWING MARKET FOR CABLE OPERATORS, WITH SUBSCRIPTION VoD PROVIDING THE BEST SHORT TERM OPPORTUNITY FOR PROFITABILITY(New York, NY - March 5, 2003) - The latest findings from Jupiter Research, a division of Jupitermedia Corporation (Nasdaq: JUPM), reveal that Subscription Video On Demand (SVoD) will drive profits and attract customers to new digital premium services. According to Jupiter Research's latest report, "The Impact of On-Demand Content on Cable Revenues in the U.S.", the Video On Demand (VoD) market will grow from $293 million in 2003 to $1.4 billion in 2007, and that of SVoD will top $800 million, up from $56 million in 2003. Collectively, this market will grow 58% annually, from $349 million in 2003 to $2.2 billion in 2007.
"Cable operators believed the on-demand system of content delivery to be the panacea of digital cable. But as products were launched and as consumer buying habits stabilized, VoD a-la-carte experienced the same problems that the Pay Per View market has been riddled with for years," stated Lydia Loizides, Senior Analyst at Jupiter Research. "Subscription VoD services are predictable both in price and content and are marketed in a way that the consumer understands. On-demand technology is not reason enough to purchase more content. Consumers are still driven toward programming first and foremost on the television platform, regardless of whether or not that platform is analog or digital," she continued.
Jupiter Research maintains that SVoD services will remain the most lucrative in the near term because consumers understand and lean toward stable pricing. SVoD offerings require no new capital expenditure and networks can readily repackage content and bundle on-demand services with basic or premium cable offerings within the digital tier only. Jupiter Research believes SVoD to be a more effective revenue generator than a-la-carte VoD for both cable operators and programmers. For operators, SVoD provides a predictable and manageable product they can market to existing digital pay TV subscribers, and a product differentiator for digital cable overall. For programmers, SVoD can serve as a separate premium service or value-add for the existing digital tier.
The complete findings of this report are immediately available to Jupiter Research clients online. For more information please contact Kieran Kelly at [email protected] or call 1-800-481-1212.
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