VOD success for HOT and Telenet

CTAM CABLE MARKETING EUROSUMMIT – BARCELONA. Both HOT of Israel and Telenet of Belgium are reporting success with their VOD services and generating an increased ARPU. During the session ‘Unlocking the It’s All About Demand’ we learned that out of roughly 700,000 digital subscribers held by HOT about 50% now take the VOD subscription at a cost of €2 a month. Yossi Lubaton, VP marketing and business development, HOT Communication Systems, told the audience the number of on-demand transactions was booming, with 9.11 million individual transactions in the month of June 2007 and 16 million in July.

VOD is offered in two tiers: the movie service is available to all digital subscribers, while about 350,000 homes take the subscription service giving access to individual programmes, of which 40% can be viewed at no additional cost, while the other programming is paid for on a per event basis. Special packages are available for multiple episodes of series and there is an S-VOD package for children. VOD usage has pushed average ARPU up by €6 per month. The most avid users are children, teens and parents. The total VOD income for the month of June breaks down as follows: 21% from the basic monthly subscription fee, 32% from S-VOD and the remaining 47% from PPV.

In Belgium Telenet is the leading provider of VOD services to its 309,000 digital subscribers (as per end of June, 2007). Benny Salaets, iDTV product manager, Telenet, credited much of the success of the service to the joint ventures with the broadcasters. All the national broadcasters are part of the offer, pubcaster VRT and private channels VTM and VT4, each with their own branding. “And they all campaigning for you on their own channels, which doesn’t cost us a cent.” At Telenet ARPU doubles when digital is compared with analogue subscribers.

Apart from daily news bulletins from the main broadcasters, all VOD content is paid for by the viewer. Only the public broadcaster VRT has a subscription for its catch up service, the others charge a fee per programme. Revenues are shared between the broadcaster and Telenet. “Scheduling is key in the success of VOD,” according to Salaets, “With movies, we make editorial categories, such as Top 10, last change to see, theme special, director’s choice and these categories really drive the business. We also found that frequency of rotation is more important than volume; people just lose oversight with big volumes.”

VOD also gives the opportunity for new content providers to deliver services, as we heard from Jennifer Grogono, chief content officer at ON Networks from Austin, Texas. The company packages content in the HD format for use across all platforms. The offer includes 20 series on various subjects, in both short and long form. “The most popular series we have are now golf tips, gaming history, feng shui and zen living,” she said, “and we have real data of usage, not biased data from focus groups. So we know that Apple TV users watch multiple episodes of a series in one session.”