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Diva's cable affiliates not hitting panic button

Thu, 05/30/2002 - 8:00pm
Jeff Baumgartner

Diva Systems Corp.'s cable affiliates said this week that the demise of the video-on-demand vendor won't cause the companies to hit the panic button in their existing VOD markets.

Diva, already buried under a $500 million deficit, filed Chapter 11 on Wednesday. Leading interactive program guide provider Gemstar-TV Guide International then agreed to acquire Diva's software and technology assets as part of a pre-packaged bankruptcy deal.

Because Gemstar-TV Guide had no plans to buy Diva in order to run its own VOD company, that left industry observers to wonder if that could leave Diva's VOD affiliates twisting in the wind if they didn't execute a quick stop-gap. Apparently, they'll have enough breathing room to get the VOD house in order.

Diva's three MSO clients - AT&T Broadband, Charter Communications and Insight Communications - appear to be able to handle the change. However, of those three, only Charter has come forward with a formal deal with another VOD system vendor, Concurrent Computer Corp., but has yet to name a new VOD content and transport provider.

An AT&T Broadband spokeswoman said that the MSO's VOD customers won't see any change in the service in the near-term, and that AT&T is working with Diva to determine the next steps. AT&T Broadband presently offers VOD with Diva in Culver City and Westchester County, Calif. and in the Atlanta, Ga. area. The MSO originally also planned to tap Diva to launch VOD in Pittsburgh, Pa. and San Francisco, Calif., but hasn't provided a specific launch time frame.

AT&T Broadband has "thoroughly evaluated all other VOD providers," the spokeswoman said, but has yet to announce any deals.

Insight, meanwhile, was much further along in terms of VOD deployments, having launched the service in more than 10 markets so far. Insight, through Diva's help, served about 200,000 VOD-enabled homes at the end of the first quarter of 2002.

An Insight spokeswoman said its VOD customers won't see any changes in the service for now, as Gemstar-TV Guide has agreed to support it for a "significant amount of time…well past the end of this year."

Although Insight has not made any public deals with another VOD system/server vendor, it already has secured TVN as its new VOD transport and content provider. Diva said months ago that it would bow out of the VOD content market by this June.

As far as new VOD system and server vendors, "we've been looking at others for some time and will continue to do so," the Insight spokeswoman said.

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