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On-demand takes center stage at CTAM

Sun, 03/31/2002 - 7:00pm
Staff

Video-on-demand and subscription-VOD were hot topics at last month's CTAM Digital Conference in Los Angeles, as operators and programmers explained how such services could be marketed to generate revenue and bust digital churn.

Comcast Corp. officials, for example, said it will entice consumers with free SVOD trials, as well as other marketing tactics designed to remove barriers of consumer acceptance and drive digital penetration. Other carrots Comcast will dangle in front of potential VOD subscribers include discounted movies, and free access to on-demand programming from cable networks and kids-related content. Comcast also plans to offer tiered on-demand services, including an "on-demand classic" tier (on-demand access to basic cable channels, kids programs and discounted VOD titles) for $9.95 per month, and an "on-demand plus" service for $14.95 per month (content from the "classic" tier and access to SVOD content from premium networks such as HBO, Showtime and Starz Encore).

Comcast, among the most aggressive MSOs when it comes to VOD, has launched the service commercially in 19 systems. The company plans to market VOD services to consumers "full-scale" with direct mail and video promotions by the second half of the year, said David Watson, Comcast's executive vice president of sales, marketing and customer service.

Programmers also got into the act, as Discovery Networks unveiled plans for its own on-demand service. The company overviewed paid and free on-demand content, as well as a video encyclopedia and a content service for schools.

On digital churn, conference keynoter John Sie, chairman of Starz Encore Group, urged MSO leaders to maintain their focus on launching new SVOD services, and not to spend too much time strategizing. "Digital growth share is critical," he said, alluding to eroding market share attributed to DBS. Sie said cable must grab 68 percent of new digital-subscriber growth, or the industry's basic subscriber base will continue to erode. Sie added that cable has a window of opportunity to leverage an on-demand offensive against DBS, as execs at EchoStar and DirecTV focus attention on their pending merger.

Sie also argued that forthcoming Internet VOD services such as Movielink do not threaten the cable industry, but legitimize the need for cable modem-based streaming applications. Still, the service–which is backed by MGM Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros.–is "egging cable on" to do more with VOD and push for better splits.

Sony Pictures President and Chief Operating Officer Mel Harris acknowledged that part of Movielink's goal is to pre-empt digital pirates, but noted that it will help Hollywood leverage the growing availability of broadband to movie-hungry consumers.

"Thick" vs. "thin" overblown?

While VOD and its potential impact on digital growth was the conference's most discussed topic, the long-standing "thick" versus "thin" digital set-top debate continued to brew, as well.

Mark DePietro, vice president of marketing and systems engineering for Motorola Broadband's DigiCable unit, weighed the pros and cons associated with digital video recording (DVR) functionality.

Using a network DVR scenario with a legacy "thin" box, DePietro noted that on the downside, such a system has high bandwidth requirements, can put a strain on available headend space and generally isn't designed to handle networked "whole home" DVR functions. On the upside, a networked DVR platform leverages existing VOD infrastructure, requires less aggregate storage and is more immune to disk crashes.

Meanwhile, Cablevision Systems Corp. Director of New Media Projects Robert Rosentel argued whether the concept of a "thick" client actually exists. What he said matters most is how the box is used, rather than how powerful it is, noting that it's literally impossible to build a box that satisfies the technical requirements for every application that might be offered in the future.

A "thin" box with high-speed connectivity, linked to services and applications on the network, is the most viable answer, Rosentel said, noting that upgrades could be downloaded to the set-top later.

"It's the only way to go, in my opinion," he said.

Clearer skies ahead for cable conferences?

Despite a down economy and the travel fallout of 9/11, CTAM's annual Digital Conference enjoyed a small year-to-year rise in attendance.

Bucking the trend tied to smaller and occasionally meager trade show and conference turn-outs, CTAM drew 1,259 attendees, compared to approximately 1,200 in 2001.

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