The emergence of VOD is an outgrowth of convergence, characterized by a full integration of the capabilities of the TV and the PC. Advances in the computer chip’s processing power, coupled with improvements in content storage capacity enable cable TV companies to meet the individual wants of viewers.



Much of the VOD viewing action is usually in sports, news, movies and children programming. And for a start, most of on-demand programming can be free. While cable TV companies can develop new advertising applications, marketers have no choice but to come up with more creative solutions otherwise the VOD segment may move on with only limited ad involvement (Scott Donaton 2005).

As phenomenal as the impact of VOD is for viewers, the potential for marketers and their advertising agency partners is equally enormous. However, taking advantage of it may not be easy. There are three fundamental areas to consider in making VOD a dynamic ad-supported medium, so says Scott Ferris, Snr.VP and GM of Atlas on Demand, USA, namely: the need for an economically efficient ad-insertion model whereby agencies do not have to relate with a couple of cable operators to make a national VOD ad buy; the need for cable operators to sort out the data sharing and privacy issues that will deliver demographic measurements to advertisers; the need for content providers, i.e. the networks and the cable TV operators to strike a viable commercial agreement (Abbey Klaassen 2005).

For media buyers, exclusivity of a buy is a concern, e.g. if a landmark programme that was sponsored by an advertiser is achieved for VOD use, does the advertiser continue as the sponsor after a consumer selects to view the show on VOD? (Lisa Sanders 2005). Secondly, media buyers should worry about how to price premium content, such as a movie classic.

Accompanying VOD are measurement companies which make it possible for cable TV companies to begin to make monthly on-demand reports available free to programmers and advertisers. Their reports usually cover four standard metrics, namely: the number of VOD-enabled Set-Top Boxes in a designated market; total views by programme per month; the number of unique Set-Top Boxes viewing a programme by month and; the total minutes viewed by month.

Although the penetration of VOD in the United States is still low – understanding how to exploit it is largely strange to creative directors- 72% of digital-cable subscribers who have paid for it rank VOD as the most important asset of their digital-TV service, according to a report made available by online market-research firm Jupiter Research (Kris Oser 2005). VOD revenue and use, is, however, increasing. By the end of this year, 97% of America’s over-34 million digital cable subscribers are expected to have VOD, while the revenue is projected to grow at the compound annual rate of 30% to $2.7 billion (Abbey Klaassen).

VOD promises improved targeting and possesses the ability to achieve a higher percentage of a desired demographic. The very fact that subscribers opt-in confirms that the brand message resonates with the consumers. On-demand is not restricted to cable TV. Radio networks, which syndicate top-rated talk personalities, e.g. in the US, also offer their content on demand. However, unlike the free, ad supported VOD cable TV companies dream of, radio networks in America have adopted subscription-based models that permit listeners to pull radio shows on demand, in addition to being able to access behind-the-scene show preparations and other premium content.

ABC/ESPN Radio Networks considers the branding of its high-profile personalities as its most important objective. It offers on-demand services for ESPN Radio shows, conservative talker Sean Hannity and “MoneyTalk" host Bob Brinker. ABC/ESPN offers free audio streaming thereby turning the subscription model into on-demand and insider access.

Radio networks in America have been offering on-demand services since 2001 perhaps because radio has a reduced bandwidth compared to TV. Premiere Radio networks, which in 2001, launched subscription-based on-demand access to several of its popular personalities, does not offer free streaming, though subscribers can listen online, time-shift shows, download MP3s of a broadcast for onward transfer to a portable device or store on a CD, and even watch video of the host.

Premiere has also created proprietary RSS-style software that automatically delivers podcasts of a couple of its more popular personalities to subscribers’ computers or portable MP3 players. It is interesting that neither Premiere nor ABC/ESPN sells advertising in order to support their on-demand services.

Digitization will push Nigerian media away from their traditional method of broadcasting shows for free and selling ads to make money. Our TV broadcasters and Cable TV companies can change the fundamental nature of the TV content distribution business by coming up with VOD and online initiatives; this is possible by moving prime time programmes to VOD paid services that allow consumers to time-shift their viewing. Alternatively, they could maintain free access, also to on-demand content, but new effective forms of sponsorship and advertising within such would be sold (Robin Good 2005).

The impact of DVRs, VOD and iTV will put Nigerian broadcasters in a permanent state of discomfort. Our marketers should become knowledgeable about VOD because of the opt-in element in a world where viewers are increasingly discovering new ways to skip ads. Marketers should not only get a sense of this, they should also ensure that they could own the VOD space for their own brand.

VOD technology suppliers and VOD software vendors need to evolve on the Nigerian media scene, while marketers must look for new ways to reach consumers, from sponsored VOD to podcasts. MTN, V-Mobile, NB Plc, Guinness, Coca-Cola, etc. should become entertainment producers, funding and creating films, documentaries, concerts, video games and cell phone entertainment tailored to specific consumers (Melanie Wells 2006).

Marketers should explore ways of using VOD to get consumers interested in their products to opt into a large ad message. However, whether Nigerian consumers will pay for on-demand content or opt for ad-supported versions is a question for the future.