The Communications Market 2010: UK
Advertising now the main source of online television revenue
Online TV is still an emerging market and content providers use a number of business models to support the delivery of TV content in this way. The main business models include:
- download-to-own (DTO) - consumers pay a fee to download a permanent copy of a programme. This model is used by services such as Apple’s iTunes;
- pay-per-view (PPV) - consumers pay a fee to watch a single stream of content. This model is used by LOVEFiLM. A variant on this model is ‘download to rent’ (DTR) whereby consumers download content that they must watch within a defined period, often 48 hours. After watching, or after the time period is up, the content expires. DTR services include iTunes, blinkbox and CinemaNow.
- subscription - consumers pay a monthly fee to allow them to download or stream content. Examples include Movie Europe and Sky Player.
- free-to-view (FTV) - advertising-supported free-to-view content, such as provided on ITV Player or services like MSN Video Player.
Data from Screen Digest show that revenues from free-to-view streams have grown rapidly over the past two years to reach £54.3m, well over half the total revenue raised in 2009 by online TV providers in 2009 (£94m). This has been driven by the success of catch-up services like ITV Player, 4OD and Demand Five, and also by the launch of new non-broadcaster advertising-supported services such as MSN Video Player and SeeSaw (a VoD service owned by transmission company Arqiva and based on the platform assets of the BBC Worldwide, ITV and Channel 4 joint venture, Project Kangaroo).