The report suggests broadcasters could see £280m of annual ad revenues disappear if they failed to develop effective strategies for monetising VOD content. PwC estimates that around 15% of TV viewing will be via VOD platforms by 2014.
It also warns that the rules could seriously threaten the already troubled linear TV ad revenues of commercial broadcasters, as most are currently running advertising around their on-demand content, such as recent YouTube deals agreed by Channel 4 and Five.
PwC says: “There is a risk that revenues could fall before they rise, as companies experiment with new models before getting it right…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 also tresses traditional television is not under threat, but broadcasters should act now before ad revenues go elsewhere.