Video -on -Demand: ABI Research says Convergence and Content Control Will Define It

Within five years, video-on-demand will start to make an impact on television programming and over the following several years it will mature into a full-fledged service available to many viewers worldwide.

Oyster Bay, NY - September 15, 2005 - Within five years, video -on -demand will start to make an impact on television programming and over the following several years it will mature into a full -fledged service available to many viewers worldwide, according to a new study from ABI Research.


When that happens, traditional scheduling will no longer determine how we watch TV, says Michael Arden, the firm's principal analyst of broadband and residential entertainment technologies.

The new research, Video -on -Demand and Personal Video Recorder Markets, examines the growth of the VOD and PVR subscriber base across CATV, DBS, DTT and ITPV networks, and assesses the uptake of non -operator VOD and PVR services. New topics in this year's report include "standalone" VOD and PVR services, and the hotels market.

What will drive this evolution? First, the movement to IP (Internet Protocol) delivery of video will be a key factor. Operators want to maximize the efficiency of their networks, and will turn to IP technologies to allow them to compete on cost.

TV viewers will provide more demand, says Arden: this is the kind of control that consumers have shown they want to have. "Movies shown on a schedule won't interest consumers much because they'll be able to go to a VOD portal at any time and pick out any movie that's ever been made."

Will this affect the quality and variety of content on offer? We can already see a fundamental shift in the economics of production. HBO, Showtime and others are putting out more and more original programming. The research shows that content ownership will become increasingly important. "We're seeing operators worldwide starting to buy production companies," says Arden, "because they want to be able to control the way content is produced, and they can cut out the middleman to maximize revenue."

Before all this can happen, many older DSL and fiber -to -the -home networks will have to be upgraded, but new rollouts are already on -demand capable.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information visit www.abiresearch.com, or call +1.516.624.2500.

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