Pricing considerations in video-on-demand systems

Abstract

Video-on-demand (VoD) has been an active area of research for the past few years in the multimedia research community. However, there have not been many significant commercial deployments of VoD owing to the inadequacy of per user bandwidth and the lack of a good business model. Significant research efforts have been directed towards reduction of network bandwidth requirements, improvement of server utilization, and minimization of start-up latency. In this paper, we investigate another aspect of VoD systems which has been largely neglected by the research community, namely, pricing models for VoD systems. We believe that the price charged to a user for an on-demand video stream should influence the rate of user arrivals into the VoD system and in turn should depend upon quality-of-service (QoS) factors such as initial start-up latency. We briefly describe some simple pricing models and analyze the tradeoffs involved in such scenarios from a profit maximization point of view. We further explore secondary content insertion (ad-insertion) which was proposed elsewhere [1] not only as a technique for reducing the resource requirements at the server and the network, but also as a means of subsidizing VoD content to the end user. We treat the rate of ad insertion as another QoS factor and demonstrate how it can influence the price of movie delivery.