"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.

and

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

You Tube now has the chance to become a VOD destination

Great news that channel 4 have announced that they have signed a deal with You Tube to to make hundreds of its homegrown shows available on demand.

The Independent reports that

the broadcaster's original, commissioned programmes will be added to the site in the coming months, plus 3,000 hours of archived shows.
Programmes will be seen in full and free-of-charge, but the service will be supported by advertising.

The deal now means that as Paid Content say

So YouTube now has one of the four key UK broadcasters’ names to wave in negotiations with the other four, a real platform from which to negotiate for content that would make it a real TV VOD destination.

Man City take on the world of online media

Manchester City have been getting most of the football transfer headlines this summer and now it seems that their riches will result in an assault on the world of online media.

Paid Content reports that

its Endemol-produced flashy new website has completely free video content while search marketing and creative agency deals are designed to win over fans worldwide

Some of the features include free video on demand,search marketing and perhaps not surprsingly given the nature of its backers,an Arabic version

Is Video on demand ever to make a profit.

The subject is discussed over at Paidcontent and their conclusions are not good.

The success of the BBC-I player,Itv.com and Channel 4 on demand show that there is a market out there.The problem is as with most things on the web people aren't willing to pay for them.

It notes the conclusions of Brand republic which said that

The dilemma facing VoD service providers is that the market is too nascent to yet be treated as a significant revenue stream in its own right.

And cites the relative failure of Channel 5 which

Last week officially rolled out Demand Five, which offers a mixture of free and paid-for shows. The broadcaster's head of strategy Kieran Clifton says the service has achieved early growth, but he expects it will take some time to gather real momentum.

and according to its head of strategy is at the moment

losing money and, effectively, the more popular it is, the more money we lose, whatever we do with advertising,' VoD is a small fraction of our audience right now and we do it because we have to give viewers what they want. It also -allows us to learn about what people want to watch and when, and what they will put up with in advertising.'

But there is an upside for recent research shows that people who download Vod are more likely to watch advertising associated with it.Media agency Starcom

identifies key areas, such as pre- and mid-roll spots, as well as sponsorship, overlays and display formats, which could work well on the platform

.