Our take...
The large number of videos viewed from free and subscription video-on-demand packages is increasingly reminiscent of strategies adopted by US cable companies including Comcast, which has revealed in the past that 95 per cent of all of the videos viewed on its platform are watched on a non-PPV basis. Screen Digest forecasts that roughly 65 per cent of all Virgin Media's on-demand views in 2008 will be of non-pay content, with a further 30 per cent through SVoD packages. Like Comcast, just 5 per cent of content will be paid-for on a transactional basis. The data is the first detailed on-demand usage data released by Virgin and validates Screen Digest's cable on-demand model. Virgin revealed that VoD movie service FilmFlex, which represents an estimated three quarters of these paid-for views, achieved 30m VoD rentals since launch, almost identical to Screen Digest's estimate of 29m views.

Overall, Virgin's results are positive for the UK's VoD industry. Although the company still has some way to go to quite match the volumes of content available on US cable VoD offers, nearly ten per cent of Virgin's consumer level revenues are now derived from on-demand content. According to Screen Digest estimates, Virgin achieves the highest on-demand usage rates in the UK and, despite the high demand for free content, also benefits from the highest UK buy-rates for paid-for material. While revenues are in no way great enough to justify a stand-alone business, despite Virgin's assertion of the market being on the verge of a 'fundamental change' in TV viewing, VoD is nonetheless finally making some headway in the UK pay-TV space.