When Will Web VOD Turn A Profit? Five Losing Money On Demand

imageCan internet VOD TV ever turn a profit? If the audiences attracted by BBC iPlayer and, increasingly, ITV.com, are anything to go by, they should do soon. But the sub-text of this Marketing feature is the market’s too nascent to make money from. Most interestingly, this on Five’s new Demand Five offering from strategy head Kieran Clifton: “At the moment we are losing money with the service and, effectively, the more popular it is, the more money we lose, whatever we do with advertising.

Five launched a limited VOD offering in 2006 but charged money for shows, £0.99 to £2.49. Having watched that experiment and set a New Year date for a bigger, better launch, Demand Five – unveiled last week, but Windows-only – still asks viewers to pay for some shows, like CSI. The site explains “this is due to specific deals with production studios” – but, really, it should aim to pay those studios from advertiser fees, not PPV charges for shows that were already free on TV. This only seems to demonstrate that some players haven’t yet found the sweet spot in what is still a young sector. When Kangaroo eventually launches, it will have had the benefit of watching and learning from broadcasters’ individual efforts.