Video on Demand market heats up

Valerie | 06 Jul 2009, 09:02

As US video site Hulu gears up for its imminent launch in the UK market, a number of stories have focused on the opportunities available for the company following the void left by Project Kangaroo, the proposed video on demand platform offering content from BBC Worldwide, ITV.com and Channel 4’s VoD which was blocked by the Competition Commission earlier this year.

Broadcast reports that the News Corp, NBC Universal and Disney-backed service is offering British broadcasters equity stakes in Hulu UK plus a share of online advertising, with ITV and Channel 4 named as contenders for content acquisition deals. The Telegraph meanwhile, writes that Hulu is looking to partner with British ISPs to ensure users will receive high quality video output.

The ascendance of Hulu, which is now the second most-watched video site in the United States after YouTube is in marked contrast to the declining fortunes of Joost, an early pioneer in bringing popular TV shows and movies to the Web, who announced last week that it would be dropping its consumer service, cutting jobs and losing its high-profile chief executive as it struggles to find revenue to survive.

Out-going CEO Volpi confirmed that it plans to reinvent itself as a white label platform for cable and satellite broadcasters:

“Today we’ve decided to make some changes. In these tough economic times, it’s been increasingly challenging to operate as an independent, ad-supported online video platform.“

Volpi’s comments reflect the importance of experimentation with the VoD business model as providers struggle to make an impact in a saturated online market. As the film industry transitions to digital, undoubtedly, there will continue to be some “bumps in the road”.

Boasting (by its own accounts) 40 million monthly users and accounting for 396 million monthly video streams, it certainly has the potential to realise its ambition of becoming the dominant video-on-demand service. With ITV already confirming that it believes that an aggregator in the UK has a role to play, and Hulu long explaining that it helps to boost content providers’ businesses rather than cannibalise them via aggregation, the scene is set for the predicted September launch of a VoD service that could dramatically influence UK viewing habits in the future.