iPlayer will "never, never replace regular TV"

 

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By Stuart Turton

Posted on 15 Sep 2009 at 15:14

Analysts have poured cold water on the rocketing popularity of video-on-demand services such as the BBC iPlayer, claiming they're always likely to remain a niche.

"At the beginning of the decade people thought VoD was the next big thing, but it's never, never going to replace linear television services," Tess Alps, chief executive of analysis firm Thinkbox, told delegates attending the Westminster eForum discusson on IPTV services. "At best they'll take 20% of the market."

It was an opinion held by the majority of analysts, with Claire Enders of Enders Analysis claiming the services would struggle to make money. "We estimate that by 2013 VoD services will generate £200 million in direct revenue and £100 million in ads. That's not an insignificant amount, but given the vast amount of investment, that's a disappointing number."

At the beginning of the decade people thought VoD was the next big thing, but it's never, never going to replace linear television services. At best they'll take 20% of the market

According to Enders, the rise of VoD is being hampered by services such as Sky+, which allow people to record programs or series and watch them back at their leisure.

However, Asanga Gunatillaka, head of commercial and strategy for Virgin Media suggested the benefits of VoD can't simply be measured on the amount of money it makes a broadcaster. "55% of our 3.7 million customers use VoD. If we can package these services the right way that leads to customers signing up to higher value bundles, and we've noticed lower churn because of them."

Gunatillaka also revealed that Virgin has been trialling ads around its catch-up service with 100,000 customers over the past three months. "We realised early on that people are happier when adverts are relevant to the program they're watching: haircare products after Britain's Next Top Model, or homeware ads during Grand Designs," he revealed, though he wouldn't confirm when ads will be fully rolled out.