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News Analysis
DIRECTV, Dish Lagging In VOD Buy Rates
By Swanni

Washington, D.C. (March 5, 2013) - DIRECTV and Dish continue to have problems persuading subscribers to order Video on Demand movies, according to new data released by the NPD Group.

The research firm estimates that DIRECTV and Dish generated an average of just $10.33 per subscriber in Video on Demand revenue in 2012. That's an average of just slightly more than two HD films for the entire year, considering that DIRECTV and Dish's VOD cost for HD movies start at $4.99.

The low total perhaps should not come as a major surprise although both satcasters have invested heavily in promoting their Video on Demand services. Unlike cable and telco TV services, neither DIRECTV or Dish are Internet Service Providers as well as video providers. Without an Internet service to offer, the satcaster have had more difficulty getting their subscribers to connect their set-tops to the Net to access Video on Demand films.

In contrast, Verizon and AT&T, both of which offer Net service as well as video service, averaged $25.29 in VOD revenue per subscriber in 2012. Cable operators, which also offer both Net and video services, averaged $13.83.

In overall market share, cable TV operators captured 56 percent of the $1.3 billion market while satellite got 27 percent and the telcos received 18 percent. The telcos' market share is lower than their 'average-per-subscriber' number because they have fewer subscribers. Likewise, the satellite and cable services' share is higher because they have more subscribers.

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