Nielsen: VOD a boon for marketers and cable alike

Michelle Clancy | 31-12-2013

We've been aware for some time that video-on-demand (VOD) can boost ratings for marginal programming, but those benefits also extend to marketers, according to Nielsen.

The measurement company found that distributing popular entertainment programmes as on-demand choices can have a positive impact on ratings contribution, and possibly even recapture certain demographic groups that were trending in other directions. And, it could cannibalise DVR usage.
By its very 'on-demand' nature, VOD is helping consumers to embrace accessing content through a selection menu as opposed to simply channel surfing. That behaviour is being reinforced by uptake for the likes of Netflix, which has a 29% penetration rate in US TV homes. But, the initiatives of cable and satellite companies in taking recently telecast programs and making them available via an on-demand menu with all national ads included could appeal to advertisers, Nielsen said.
On-demand users actually watch longer and tend to watch more of the commercials shown with their programmes. While research is still ongoing, a 30-minute programme that was studied found that on-demand users watched an average of 28 minutes, compared with digital video recorder (DVR) users' 23 minutes and live viewers' 20 minutes.
"At least some of the credit for this viewing trend should be attributed to the cable operators and their content deals, which have led to increasingly stocked VOD libraries, as well as the viewing delight of consumers," the company said. "The cable operators have also placed an emphasis on improving the interfaces that allow consumers to easily access this content."
In fact, on-demand viewers indexed highest on commercial viewing (likely attributable to the fact that fast-forwarding is often disabled). "Despite initial predictions that disabling fast-forwarding could dissuade viewers from VOD, consumers know a good deal when they see it premium, prime time content when they want it, in exchange for commercial viewing," Nielsen said.
The rise of VOD could also affect DVR usage, which has seen steady gains in time spent over the last half decade. However, a higher percentage of non-live commercial viewing (55%) came from VOD for people 18-24 when compared to DVR contribution in Nielsen's latest analysis. As expanded libraries of cloud-based VOD coupled with improved interfaces continue to gain industry momentum, this could be a technological harbinger that on-demand is in prime position to change viewers' consumption habits.