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Some analysts question whether VoD can be as profitable as broadcast TV. The dual costs of piping internet video into the home and licensing content from producers - both paid out on a per-view basis - "may call into question the level of profits that can be made in the long term" from VoD, says David Cockram of Oliver & Ohlbaum, a media consultancy. "More people are taking more of the pie."

Broadcasters already have to pay companies providing "content delivery networks" to ensure their on-demand programming reaches viewers in good quality and without loading-time delays mid-video. Every time a programme is viewed online through their VoD services, the BBC, ITV, Channel 4 and other broadcasters pay a CDN provider such as Akamai, Level 3 or, soon, BT.

Today, one half-hour programme costs between 2p and 5p to stream through a CDN every time it is viewed. That may not sound much, but with the BBC iPlayer serving up almost 60m TV shows in November, a broadcaster's CDN costs could already exceed £1m a month.