While companies weigh bids for Hulu and industry heavyweights complain that TV Everywhere isn’t going much of anywhere, another way to watch time-shifted television is quietly gaining traction: video-on-demand, or VOD.
Glittery, those three letters are not. VOD rarely gets media attention, partly because of past missteps by cable and satellite providers.
But more TV episodes and movies are becoming available through the on-demand systems that cable subscribers can tune in with their set-top boxes. Some shows, like Fox’s “The Following” and ABC’s “Scandal,” now gain hundreds of thousands of viewers every week because of VOD, part of a decades-long shift from television on a linear schedule to television on viewers’ own terms.
“On demand isn’t always the shiniest new technology. But we are seeing tremendous growth,” said Matthew Strauss, who oversees digital strategy for Comcast, the nation’s largest cable company.
Some providers, Comcast among them, see VOD as a low-key savior — a way, albeit one of many, to make programming more accessible while keeping customers tethered to their cable subscriptions.
Some television networks are also big believers in the technology because it can help partially piece back together their splintered audiences and protect their advertising revenue. Fast-forwarding can be, and often is, disabled by the cable providers, giving advertisers confidence that their commercials are being seen.
This is “crucial,” said Toby Byrne, president for advertising sales at Fox. Video-on-demand “will hopefully replace some digital video recorder viewing, where fast-forwarding is enabled,” he said.
Byrne talked up VOD at Fox’s annual upfront presentation for advertisers in New York on May 13, as did his counterpart at ABC, Geri Wang, at her network’s presentation a day later.
Wang said cable VOD now accounts for 3 percent of the prime-time audience that ABC sells to advertisers. That’s because this TV season, for the first time, Nielsen counted VOD views of ABC’s shows the same way it counts digital video recorder playback — that is, within three days of an episode’s premiere.
To count, though, the same ads that were shown on television have to be attached to the on-demand version of the episode. So ABC does that until the fourth day, when it substitutes a different, sometimes shorter set of ads. Two-thirds of the VOD views of its shows happen after that point.
“For the viewers and for our buyers and clients, there has not been, I think, enough attention around this,” Wang said.
The VOD story is partly one of missed opportunities. Comcast, for instance, introduced on-demand capabilities a decade ago. But for years its system, and the ones promoted by other providers, was cumbersome to use and lacked a critical mass of hit shows. (HBO, which supplied a wide selection of its shows early on, was the exception.) For prime-time viewing, VOD became an afterthought in the minds of many consumers and channel owners.
But the technology caught on in other areas, like movie rentals, children’s shows and music videos. And in the last few years cable providers have made concerted efforts to lock up prime-time programming, especially from the broadcast networks; they say their on-demand libraries need to have a consistent number of episodes, preferably a season’s worth for each show, so viewers have enough trust in VOD that they skip the digital video recorder.
There are signs that this strategy is working. This television season, VOD views of ABC’s shows are up 32 percent versus the same period last season, according to the network.
“If viewers objected to not having fast-forwarding capabilities, our episode starts wouldn’t be up 32 percent,” Wang said.
Overall, Strauss of Comcast said the company’s subscribers watch 400 million hours of programming on demand each month. Its subscribers use the DVR less than the national average of 45 percent of cable subscribers nationwide who use one, a statistic the company credits to its on-demand offerings and an improving interface through which to access those offerings.