Wednesday, December 30, 2009

"Broadcasters have never had to manage distribution themselves before"

How profitable will video on demand be for content producers as free internet catch-up services move into the living room?

This morning's FT asks that question as the BBC's project cnavas has now got approval from the BBC Trust to go ahead.

According to Futuresource Consulting

one in five flat-panel TVs shipped in Europe next year will be ready to connect to the internet straight out of the box.

With iPlayer already available on several set-top boxes and games consoles, soon millions more households will be watching VoD on the screen for which it was originally intended - but delivered over the internet, not an aerial.

Yet according to Michael Cormish, chief executive of Blinkbox, an independent VoD service.

"Broadcasters have never had to manage distribution [themselves] before," he says. "VoD is an attempt by the broadcasters to selfdistribute and that is the reason why they will find it tough. It is not a skillset they have required . . . Most will end up spending a multiple of their initial budgets to try to compete, or simply exit."

Whether broadcasters will have to start charging for the service will become a moot point but it may be the only way to effectively subsidise the content