With YouTube and Netflix among the dominant players providing online video, other companies looking to enter the market will need to take a targeted approach.
With the dominance of free information and video content online, content creators and distributors need to find ways to add value and attract audiences if they want to charge for specific online content.
A survey of U.S. online video viewers, conducted by Vision Critical for Vancouver’s Elastic Path Software, found that 56% of viewers who already pay for online video content do so because they wanted the flexibility of watching the video content any time.
About a third said the online service was cheaper than more common alternatives like a regular cable or satellite service, or renting or buying DVDs.
Matt Dion, vice-president of marketing at Elastic Path, said other ways of creating value include providing high-definition content or additional content to complement what viewers are looking for.
The survey found that most respondents would be willing to pay extra for online videos if it meant they could watch without advertisements. About 44% said they would pay for the ability to watch HD content and a third of respondents would pay to watch something in 3D.
Accessing a catalogue or list of previous episodes as well as special features were also points people valued as part of a potential online video service.
Dion also noted, however, content providers should not only tailor their products to the types of devices people use, from laptops to smart phones, but mould their services and marketing initiatives to specific audiences.
“Customize your offering to Gen-Y [18 to 34 year olds] because they're a growing market have their own behaviour that’s different from the older generation.”