Some have predicted VOD sales in Canada to double each of the next few years, climbing from an estimated CDN$85 million in 2004 to $450 million in 2007. Part of what’s driving that explosion is what David Purdy, VP and GM of television services for Rogers Cable, calls ‘the holy grail of video on demand:’ main network, episodic programming. So it was good news for Purdy when Rogers signed Survivor: Cook Islands to an exclusive on-demand license in the North in September.
The Rogers’ service kicked off in 2002 with a trial that saw ROD in 1,000 homes. Today, VOD is accessible in nearly a million digital homes, and Purdy says about 200,000 households will be added every year going forward.
Purdy believes content has been the main driver behind that growth. While he suggests there may have been an initial belief the customer base was finite, the more content added to the system, the higher the buy rate has been. He notes that as each Hollywood studio has come around and accepted the platform, there has been a corresponding 10% to 20% lift in weekly buys for movie content.
Interestingly, however, he says it is not feature content that will drive the platform in the long-term. ‘We’re anxiously looking for not just the obvious content,’ he says, ‘but also for what we call the more niche, or long-tail content as it has been characterized. I think we are at a point now where instructional video on demand content makes a ton of sense.’
In fact, it wasn’t movies but the World Cup that moved the service lately. While the event is mammoth internationally, it’s generally been a yawn in Canada – except this year. Last June, ROD offered Cup coverage free to subscribers and realized close to a million downloads – basically, one download per subscriber. The content was divided into games (disavowing another notion that consumers only wanted live sports events), and behind-the-scenes content. Purdy says the World Cup has spurred a 20% to 30% rise in VOD transactions since.
Between 10% and 15% of those orders were also in a language other than English. Says Purdy, ‘I think what it did for us is highlight how multicultural our base was. [After the Cup], we saw a corresponding lift on our Italian, Portuguese, Mandarin and Cantonese on-demand content. I don’t think many of these people had been to the VOD site yet, probably thinking that there was nothing there for them.’
Purdy believes on-demand has a huge upside that has yet to be realized: ‘Right now, I would say about 20% of the digital base is actively using video on demand. That means eight out of every 10 customers are still finding the platform. The trick will be to migrate them over.’ Purdy puts the solution down to more content and marketing: explain the service better, and then hook people once they’re on it.
ROD also took the step of launching a second VOD net for kids during the day in order to take advantage of lulls in the digital asset usage. Treehouse On Demand is offered free to Rogers digital customers and the traffic doesn’t interfere with ROD’s 8 p.m. to 2 a.m. peak. For future improvements, look for Rogers to revamp its interface to include recommendation tools and user-friendly navigation. ‘I think we’ll also see better guide products in the next 24 months,’ he predicts, ‘and I think you’ll see a blending of digital set-top box and Internet technology, so that some of the things people are able to do on the Web right now with search recommendations and personalization will be ported over to the set-top box experience.’