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Broadcasters urged to maximise VOD ads

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Broadcasters urged to maximise VOD ads
PricewaterhouseCoopers (PwC) has warned broadcasters to maximise advertising around their video on-demand content or risk losing millions in annual revenues.

According to a report by the business advice giant, broadcasters could see £280m of annual ad revenues disappear if they fail to develop effective strategies for monetising VOD content, reports The Times.

PwC estimates that around 15% of TV viewing will be via VOD platforms by 2014, which could seriously threaten the already troubled linear TV ad revenues of commercial broadcasters.

The report notes that most broadcasters are currently running advertising around their on-demand content, such as recent YouTube deals agreed by Channel 4 and Five.

However, the immediate nature of such content means that revenues gained from these ad slots will fall well short of the around ten minutes per hour currently gained on linear TV.

"There is a risk that revenues could fall before they rise, as companies experiment with new models before getting it right," said PwC.

"In this scenario, selling VOD advertising without a premium of around three times that of [linear TV] advertising could result in a loss of about £280 million, equivalent to a 10% fall in total TV advertising, which is close to the forecast impact of the recession in TV advertising in 2009."

PwC partner David Lancefield said that the firm does not expect an end to traditional television, but is simply urging broadcasters to act now before ad revenues go elsewhere.

The monetisation of commercial broadcasters' VOD content could hinge on the long-mooted service launch of Project Canvas, which includes BBC, ITV, Channel 4 and Five among its members.

The platform, which recently received a provisional greenlight from the BBC Trust, aims to deliver an upgrade to the Freeview and Freesat platforms by creating a new receiver and user interface capable of delivering on-demand and internet-based services.

Despite being firmly pegged as a free-to-air platform, Canvas will also support a range of monetisation options around on-demand content from its commercial partners.

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