A Fan Base Drawn to VOD’s Freedom

As it approaches its five-year anniversary, Anime Network can pat itself on the back for getting several MSOs to support its preferred subscription-based VOD model, thus avoiding the black hole of free VOD. In addition, Anime is finding ways to maximize other revenue streams, like ad-supported VOD and mobile platforms.

"Our audience is interested in a lot more than what it can see in the living room at a set time," says Mark Williams, Anime CTO and GM. "Our viewers want to have control over how they see our content."

Of course, control over how Anime content — a mix of Japanese cult favorites re-purposed for English-language viewers and original content from parent ADV Films — is delivered rests largely with cable operators. Anime launched in December 2002 as a free VOD service on Comcast and Time Warner Cable. Breakout success with its target 13-34-year-old male (read, early adopter) demographic earned it SVOD status on Cablevision and Cox, whose digital subscribers pay an additional $7 per month. A deal with Charter to add Anime as an SVOD channel this fall will bring its total VOD universe to 33 million, according to network executives. Anime also has a deal with Sprint Mobile for $4.95-per-month subscriptions.

Subscription status is a tough road. Ohio-based Buckeye CableSystem carries Anime as a digital-tier linear network and as a free VOD channel, which typically gets an 8% view rate, says Buckeye’s VP of sales and marketing Florence Buchanan. Buckeye gets a 5% view rate for Food Network on demand, 7% for BET and 14% for the just-launched MTV on demand, she says.

Anime is negotiating with Comcast to segue from free VOD to SVOD (Comcast declined to comment about the negotiations). "Our conversation with them is, ‘Let’s not leave money on the table; let’s maximize revenue,’" says Kevin McFeeley, VP affiliate sales and new media.

But Anime executives acknowledge there’s room for multiple models. Advertising revenue for free VOD remains small, but Anime’s free content is completely ad-supported and revenue is growing, they say. "We’re encouraged Comcast is looking at SVOD offerings," Williams says. "But some consumers want a free product that’s ad supported."

Regardless of distribution, Anime prides itself on its close relationship with viewers. "Not every cable product out there has a built-in fan base willing to explore and play with the platform, but we do," says McFeeley. Tops on the fans’ wish list? HD VOD content, which Anime aims to deliver by year’s end.