Log in

Report: VOD, Mobile to See $5B Hit Due to Economy

9 Mar, 2009 By: Erik Gruenwedel

About 15% of consumers said they would cut back on monthly mobile, broadband and video-on-demand services due to the ongoing economic downturn, according to a new report.

Scottsdale, Ariz.-based research firm In-Stat said results from a recent consumer poll indicated cutback spending on portable media devices, broadband connectivity and pay-per-view programming could top $5 billion in the next 12 months.

The biggest decrease in spending on mobile, broadband and subscription TV services will come from households with income below $35,000.

Of the three, broadband would be least likely cut the most since more than 66 million consumers are using the Internet while camped out on their sofas watching TV, according to the report.

"Some male age groups saw 40% to 50% of respondents using a PC while watching TV, and about 30% of females under the age of 40 are also using a PC while watching TV," said Gerry Kaufhold, In-Stat analyst.

As a result, lower-cost PCs could represent a $2.4 billion opportunity, according to the report.

Kaufhold said new approaches using online Web portals synchronized to a TV program would continue to develop due to the relatively low costs involved.

He said cable TV operators also faced increasing competition from third-party services that deliver popular cable programming, supplemented by content delivered via broadband.

Last week, Time Warner Cable CEO Glen Britt warned the economy could have dire consequences to paid premium programming.

The In-Stat report found many media companies are attempting to identify new opportunities to "marry" TV to people simultaneously viewing a related Web site, and transform the Internet into a "lean back" experience.

Time Warner CEO Jeff Bewkes said he would like to implement greater dissemination of free original cable content to third-party sites provided the user was a cable subscriber.

Indeed, Comcast, the nation’s largest cable provider, issued a press release highlighting on-demand programming in March, including exclusive music videos from U2, NCAA March Madness, the Golf Channel, Nickelodeon; and Hollywood hits, Academy Award-winning Milk, available the same day as DVD. 

Add Comment