TelcoTV: VoD Veteran Verizon Details Plans

Having already loaded 10,000 titles onto the VoD portion of its FiOS TV service, Verizon detailed plans to make the offering easier to use and generate greater spending from advertisers, at a session at TelcoTV on Wednesday.

The telco, which plans to launch an innovative content search capability soon spanning linear and VoD assets, is working with its staffers to demo VoD when installing the service. Verizon also plans to have dynamic ad insertion capabilities up and running in the second half of 2008.

“Our buy rate for a really good movie is about 5 percent, so we’re looking at ways to help VoD in several related areas,” said Trisha Lynch, vice-president of programming at Verizon, and a former content executive with NBC, Showtime and Bravo, among others. “We’ve seen on-demand go from its early days as a churn buster to a vibrant and viable revenue generator.”

Shortly after it wraps up programming deals with a few remaining studios to offer free movies as part of its FiOS VoD offering, Lynch said Verizon will launch a redesigned electronic programming guide that will enable customers to search for titles across traditional linear TV as well as across the huge library of VoD content.

“The limitation has been that it’s been a text-based search,” explained Lynch. “In addition to expanding its reach, we will be enabling customers to recognize titles beyond name to include imagery such as poster art and [movie] stars, and will be running at eight-minute programming loop to promote the direct buy opportunity for Starz to subscribers.”

While many service providers see linear TV and VOD and separate and increasingly competing offerings. Verizon planned search options, which covers both, is proof of a different view on the two consumption modes of content. “Beyond driving more viewership to VoD, we believe it will help folks see any separating lines between the two,” admitted Lynch.

And while newer entrants seek to catch up with incumbents such as cablecos on revenue generation, it won’t happen over night, cautioned Lynch. “Next year we’re focusing on dynamic ad insertion. In the first half, we’ll be working to find out how it really works and testing it out, largely with a focused on operational aspects, in that stretch.”

In the second half of 2008, Lynch said, Verizon will roll out the capability as a business option. “Right now, VoD is all about ARPU, with most coming from transactional or the purchase of titles. We really hope next year to get the advertising business going.”

Getting premium movies more quickly after they leave the theaters and cinema megaplexes, is also a focus area for Verizon, and several large cablecos.. “Warner Brothers has given us a few top movies like ‘300’ and ‘Astronaut Farmer,’ either the same day as they hit DVD or in the following 15 days,” Lynch said. “We see it as a core way to make VoD better and have seen slightly higher buy rates.”

But with its huge cable competitors focusing on efforts with content owners for the same quicker day and date availability, and with their decades of delivering video services, Verizon is moving fast on these multiple fronts to acquire, evolve and innovate FiOS, with VoD a make-or-break focus to watch.

Verizon Communications Inc. www.verizon.com

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