Gartner: Getting consumers to order PPV, VOD still a challenge

Fri, 06/27/2008 - 8:35am
Traci Patterson

Getting consumers to order and consistently watch both pay-per-view (PPV) and video-on-demand (VOD) programming is still a huge challenge for service providers, according to a new survey from Gartner.

Of the respondents, about 75 percent had some form of pay TV in their households, but less than 25 percent of respondents had purchased either PPV or VOD content within the past year.

Globally, Gartner tallied that the average consumer spends 22 hours per week viewing entertainment on TV, of which 16 hours per week is spent watching TV and six hours watching DVDs or videotapes. Furthermore, 39 percent of all survey respondents had downloaded some form of video content (movies, TV shows or video clips) in the past three months.

Gartner said that tapping into this established behavior and providing alternate solutions to satisfy demand is essential in earning incremental revenue for IPTV.

“Consumers already value DVD and videotape purchases and rentals, so getting them to transfer this behavior or habit over to IPTV subscriptions is a key strategy in developing revenue,” said Amanda Sabia, principle research analyst at Gartner. “Providers need to ensure that ordering and navigation processes for PPV and VOD are easy to understand and user friendly. They should also offer competitive pricing, free trials and a wide range of titles, making sure they include various unique and most-recent versions.”

Sabia also advised providers to be creative in new business models, exploring "pay per day" and "pre-paid on-demand" options, as well as gaining leverage from advertisers and aggressively marketing PPV and VOD libraries.

“As competitive pressures in the consumer communications market continue to drive telephone companies to expand their suite of services to include broadcast television and video programming, telcos have to provide distinct services to convince subscribers to switch to their products,” Sabia said. “Differentiated content is a major lever for new IPTV providers to win customers.”

According to Gartner, the Top 5 global markets for PPV or VOD are likely to be China, the U.S., Canada, Germany and South Korea.

Additional information about the report – "Dataquest Insight: Consumer Propensity to Pay for Pay-Per-View or Video-on-Demand” – is available here.

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