The platforms to deliver VODs will probably see a growth within the next five years. The ways to watch films and re-watch films is a growth industry. It is a long-tail business model for the independent films shown at various festivals that don't get picked up by major distributors. Smaller distributors pick them up and market them on iMovie, cable, VODs and DVD.
Every film is different on how it will be supported on different platforms. But, genre driven content (documentaries) seem to do well on all channels or platforms.
Programmers within the VOD network are still learning and crafting the content for viewers, unlike programmers that are in the linear television business. That my not be bad news, it leaves the VOD programmers unencumbered in the structure they must follow to create programming. It is such a new media format that it does not restrict programmers to a template or set of predetermined formulas to follow. The newness allows for experimentation on what genres of independent or user generated content works best on a particular platform or channel.
Less than 15% of a film's gross income comes from the theatrical release. The money is in the ancillary products like hats, t-shirts, lunch pales, VOD and DVD sales.
It was also discussed why you can't simply search a video and watch it on you television. The main reason this type of convergence has not yet happened, technologically it could, is there are currently no business models in place to make it profitable. Network television is not willing to make it possible for a large captured amount of eyeballs to be diluted into a fewer smaller set of eyeballs. Large amounts of captured eyeballs watching programming is what advertisers are looking for in television content.
It is estimated that by 2012 the sales of DVDs will be equaled by the sales of VODs.
A quick story on how much people like to have a physical hard copy of book, CD or DVD in their hand as opposed to a digital copy. When Ken Burns released his 12 tape PBS series The War on VHS it sold around 600,000 copies. About a year after its release a viewer wrote to say that on tape 8 there was a glitch in the tape. They sent him a new copy and a month later he wrote back saying the same thing was happening. After a little investigation they determined there was a literal drop out of audio on the master. Over half a million copies sold and only one person had actually watched enough of the discs to realize there was a problem. People just wanted a physical hard copy of the series on their shelves.