Video on Demand – What is VOD?

The Canadian Radio-television and Telecommunications Commission (CRTC) first looked at “video on demand” (VOD) when YouTube was still eight years in the future. That was 1997 and the closest things to smartphones were PDAs (personal digital assistants) like the Palm Pilot and Newton, Apple’s tablet precursor. The first Blackberry did not appear for another few years (and it was a pager!). As a CRTC announcement said at the time:

“VOD services require three basic elements: a library or source facility such as a video server or servers, an interactive navigation system, and a distribution system that has been upgraded to allow for digital signal transmissions. Beyond that, there are numerous possibilities with respect to the placement of servers within the distribution system, the speed of delivery of programs, and the individual roles of distributors and VOD undertakings in server ownership and in the design of the navigation systems.”

Early Pay-Per-View (PPV)

The CRTC thought VOD fit with the next wave of pay-per-view (PPV) services. In 2012, though, thanks to greater video consumption via new distribution channels, VOD is being used more loosely. Apart from technical CRTC regulations, it can refer to video accessible at any time on any platform.

Last spring, Ipsos MediaCT and Google reported that Canadians are watching a lot of online video, an average of eight videos weekly. Has this hurt regulated VOD services? It seems not. Only weeks later, the CRTC said revenues for VOD services (in conjunction with pay-per-view and pay television services) increased 36.7% over the past five years. This happened even while US-owned Netflix brought its services in less than two years to 10% of Canadian households.

Five Categories of VOD

There are basically five video-on-demand categories. One is subject to the CRTC because it involves regulated broadcasting systems. The others are mostly unregulated because their distribution is not categorized as broadcasting (via internet service providers or mobile systems are examples). Those with services already regulated under the Broadcasting Act are subject to Broadcasting Order 2012-409 (Amendments to the Exemption order for digital media broadcasting undertakings).

Regulated VOD Broadcasting Services – Digital cable, direct-to-home (DTH) satellite or IPTV channels. Astral’s The Movie Network On-Demand is an example. These are governed by the Pay Television Regulations, 1990 (part of the Broadcasting Act). The CRTC updated this in 2010 with the Regulatory framework for video-on-demand undertakings, detailed in Broadcasting Regulatory Policy 2010-190.

OTT (Over-The-Top) Streaming Services – There are several OTT services. Google TV and AppleTV are content aggregators linked to proprietary set-top boxes. Content distributors like Netflix and Hulu don’t need special hardware. They’re available via software downloaded to gaming consoles, high-definition television sets and mobile applications, or streaming online. Canadian broadcast distribution undertakings (BDUs) follow similar models, such as Videotron’s Illico system which is available via set-top box, online and mobile. Rogers’ Anyplace TV is similar to Illico and is also available through the Xbox 360. These are generally paid services (subscriptions, access fees) with content available across as many platforms as there are service hubs or customized interfaces.

Web-based Streaming Services – Video through a web browser. Some streaming services are offered by Canadian cable and satellite companies. Other sites stream video managed by Canadian broadcasters (such as tou.tv in French Canada and cbc.ca in English Canada). There are also international portals like YouTube or Vimeo, and sites created by independent content creators (like web series). These are usually free and supported by advertising or fan donations.

Mobile-based Streaming Services – Many video-based apps are simply a front end (similar to a web interface), with video being pulled in from servers via wireless internet connections (WiFi or mobile 3G networks). Many OTT and web-based streaming services offer content via mobile apps, in addition to specialized paid streaming apps like the TreehouseTV Video app.

Downloadable Content – While downloadable video’s predecessors – VHS/DVD/Blu-ray – are not considered VOD, being able to log onto iTunes and buy a television series turns content possession into a form of video-on-demand. For example, CTV has arranged for Flashpoint to be available on iTunes, as has Showcase/Shaw Media for Continuum.

Interactive Broadcasting

VOD availability across several platforms is well established now, but a CRTC observation made 15 years ago still holds true today:

“The introduction of VOD marks an important new stage in the evolution toward fully interactive broadcasting, where control over what content is received in the home and when it is delivered is effectively placed in the hands of the consumer. VOD will allow consumers to select from a vast array of programming, and to choose when they view it.”

While we can count five VOD categories today, they will continue to be shaped and redefined by the ever-evolving combination of technology, business models and consumer demand.

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