xOD Capsule - August 02, 2005

Mon, 08/01/2005 - 8:00pm

xOD Capsule Newsletter CED Broadband Direct Current Issue Subscriptions August 2, 2005

Good-bye, youth--hello, fiscal responsibility

On the road to maturity, video-on-demand (VOD) has finally grown beyond the prepubescent stage and entered early adulthood.

Judging from the discussions at last week’s CTAM Summit in Philadelphia (see story below), all signs for VOD are pointing toward business models—a sure sign of the category’s growth.

Although the technical end of VOD is more important than ever—especially as libraries and usage surge—there’s not much time spent at marketing conferences these days discussing things like streaming, storage and transport. Nope. How to make money out of this service appears to have taken top priority. A close second is its use as a competitive weapon.

Speaking with Larry King at the show last week, Brian Roberts of Comcast Corp. was as bullish as ever about VOD’s power to differentiate the cable platform.

The latest usage figures from Comcast only fuel that optimism. Roberts noted that Comcast registered 105 million on-demand orders last month, compared to a mere 20 million the year earlier. About 70 percent of Comcast subs in Philadelphia with access to VOD use it 24 times per month. Roberts also talked up a “revolutionary” service that will push the usage needle even more—delivery of up to 500 movies per month for free to digital subs.

But cable has to continue to find a way to maintain that edge as DBS service providers leverage “push” DVR technology, and as the telcos enter the video game—with VOD in their arsenals. And one way to do that is to apply advertising models to “free” content—and to keep the programmers happy. Bickering over content rights (also a regular occurrence at last week’s conference) will only bog down the progress. But both sides have much at stake, so nothing about this will come easy.

But unless someone’s willing to blink, VOD could soon find itself going from the joys of early adulthood and into the troubles of a mid-life crisis.

—Jeff Baumgartner

Panel: VOD business models still evolving
PHILADELPHIA--Although video-on-demand (VOD) deployments and libraries continue to expand, the burgeoning service still lacks a definitive business model.

That was the consensus last week here at a Multichannel News/B&C-hosted panel discussion at the CTAM Summit conference.

For Time Warner Cable, growth is expected to come from all three VOD categories: "free" on-demand fare, subscription VOD and more traditional "transactional" VOD, according to MSO Senior Vice President Bob Benya. No single category will serve as the "killer model," he added, noting that VOD continues to play an important role in the value of digital cable.

While the business models behind transactional and subscription VOD are fairly straight-forward, much more contention exists between operators and programmers in the "free" category.

Programmers pay big bucks for content, so the economic foundation of that content and the VOD business must be supported, explained Ron Lamprecht, vice president of new media at NBC Universal.

Although Twentieth Century Fox Film Corp. owes its growth in the VOD arena to MSOs such as Comcast Cable, a free-on-demand pioneer, the content supplier initially was leery about the model, said Jamie McCabe, Twentieth Century's SVP of Worldwide Pay-Per-View. But that position changed, he added, as it became clear over time that free content helped customers become more comfortable with the on-demand environment and transitioned them to "pay" titles.

Benya of Time Warner Cable maintained "it doesn't make a lot of sense" for an operator to pay for the same content more than once. The MSO, however, is more "open minded" on that subject if the content in question happens to be new and unique.

Still, there are models emerging that will help to pay the freight on free VOD titles.

"Advertising is important to what VOD has to offer," said Scott Ferris, senior vice president & general manager of Atlas On Demand, a company that is bringing its experience in Internet advertising to the VOD world. He said ad agencies are attracted to the advertising aspects of VOD because it offers a more measurable platform than its linear counterpart.

There are already some early successes in this area. Comcast Spotlight, for example, recently teamed with ESPN to promote the X Games using the VOD platform. There, Comcast and ESPN assembled three distinct advertising packages, offered them locally, and gave the sports programmer some valuable exposure, said Warren Schlichting, vice president of new business strategy at Comcast Spotlight.

In terms of bringing business models together among operators and programmers, Time Warner is also excited about the possibilities of "start-over," an application in the works that enables viewers to restart programs, but does not allow them to skip ads. Customers ranked it first among 30 features brought up in a survey.

"We think it's an interesting place to start," Benya said.

Programmers, meanwhile, are growing more interested in VOD as the costs of encoding content, transporting it and storing it continue to drop, but are not yet ready to put all of their resources into it.

"We think there is a business there," McCabe said. "A big business? I'm not sure."

PixelPlay goes cross-platform
PixelPlay has launched a platform that matches the emerging platform of interactive television (iTV) with the nearly ubiquitous reach of mobile phone technology.

Enabling gamers to play head-to-head via set-tops and cell phones, the cross-platform gaming service from PixelPlay will feature parlor games such as checkers, chess and backgammon, and support leader boards and prize tournaments.

Central to the platform is PixelPlay’s JIVE technology, a server-based system that centrally integrates elements such as billing and leader boards. PixelPlay supplies an SDK (software developers kit) to support companies that want to create titles and apps for the JIVE platform.

PixelPlay’s cross-platform service is already in the field with HOT Network, an Israeli consortium of cable operators, and with Cellcom Israel Ltd., a mobile operator.

In North America, PixelPlay has yet to go cross-platform, but already has relationships with EchoStar Communications for the DBS service provider’s KidsWise gaming service, and with BellExpressVu of Canada. Cablevision Systems Corp. also offers some PixelPlay titles for the MSO’s pay-for-play gaming service.

PixelPlay CEO Ron Chaimowitz said cross-platform gaming is important because any multiplayer service requires a sizable lobby of players irrespective of the technology they might be using. He added that the company will next add a broadband component to its cross-platform strategy.

It’s also becoming quite attractive to cable operators in North America as they attempt to converge their services and platforms.

“It gives them a point of differentiation and ensures that in the early states that there is a robust multiplayer environment,” Chaimowitz said.

Akimbo uploads set-top plan
Akimbo has altered strategies a bit by launching a program designed to help the company distribute its library of niche content to digital set-tops outfitted with broadband connections and digital video recorders (DVRs).

The company's "Queue-and-View" client-server system is designed to download content directly to the set-top's hard drive. Akimbo’s original business model involved a separate broadband-enabled storage device sold via retail.

Cable operators that opt for the program can download content directly from Akimbo's servers, and then redistribute titles to cable subscribers. Subscribers, in turn, will use on-screen guides or PCs connected to the Internet to select shows for download to the set-top.

Akimbo said it delivers metadata based on CableLabs specifications, and offers video in MPEG-2 and MPEG-4 formats.

“We’re ready to integrate to any set-top box,” Akimbo CEO Josh Goldman said. So far, Akimbo’s only distribution deal is for Microsoft Media Center Edition PC. Akimbo is willing to share revenue with the partnering operator, Goldman said.

The new, more agnostic strategy calls into question the success Akimbo has had so far with its initial business model, whereby customers pay a monthly service fee of $9.99 (or a one-time “lifetime” payment of $199.99), plus $199 for the Akimbo set-top.

The company, which is counting on consumer appetites for niche video fare, would not disclose subscriber numbers. On its site, Akimbo has already reduced the lifetime subscription fee and set-top price to $169.99 each.

C-COR adds to Adelphia deployment
Things are starting to add up for C-COR Inc.’s deployment of ad insertion technology with Adelphia Communications with news the MSO will convert its West Palm Beach system to the platform.

C-COR's ad insertion system already powers Adelphia's Puerto Rico, Los Angeles, Cleveland, Buffalo, Yuma, Ariz., Hilton Head, S.C., and Staunton, Va. markets. The West Palm Beach deployment will set up 10 advertising zones and 440 insertion channels.

Meanwhile, Adelphia's Cleveland system will tap into C-COR's Gigabit Ethernet Digital Program Insertion platform, creating 11 advertising zones and 450 insertion channels. It is Adelphia's first rollout of the GigE DPI platform, which can insert content ranging from standard and high definition MPEG-2 advertising to news updates, local programming, or long-form infomercials into almost 2,000 cable network channels from a single server.

Elsewhere, C-COR also inked a development deal with digital marketing provider Atlas to create a joint on-demand advertising campaign management product. Atlas will provide its Atlas On Demand automated campaign management, ad decision logic, optimization and reporting tools, while C-COR will supply its overarching on-demand technologies.

Atlas has a similar agreement with SeaChange International.

Market Video
NTL* Broxbourne, U.K. SeaChange SeaChange
Dewsbury, U.K. SeaChange SeaChange
East/Central Herts,   U.K. SeaChange SeaChange
Huddersfield, U.K. SeaChange SeaChange
North/East Bedfordshire,   U.K. SeaChange SeaChange
* Deployments extend reach of NTL's VOD service to 375,000 homes, following initial launch approximately six months ago.

We are making changes and additions (including several international deployments) to our Web- based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED editor Jeff Baumgartner.

August 2005   
Issue Contents >>

CinemaNow Inc.

Marina Del Rey, Calif.


CEO: Curt Marvis

Company claim to fame:
Broadband video-on-demand, touting a library of more than 7,500 new and classic movies, TV shows, music concerts and music videos from studios such as 20th Century Fox, Disney, Lions Gate, MGM, Miramax, Sony, and Warner Bros.

Recent news of note:
Made its initial foray into the world of high-definition video via a distribution deal with Mark Cuban’s HDNet. The deal includes more than 100 episodes from HDNet originals library, including Across America and Get Out!


Burlingame, Calif.


CEO: Gil Dudkiewicz

Company claim to fame:
Formerly known as MyDTV, MeeVee has altered an initial digital cable strategy, to one that leverages the Internet to consumers who want personalized TV search and viewing recommendations.

Recent news of note:
Ian Aaron, the former president of TV Guide Television Group, joined the MeeVee board last week.

CED Webcast:
"Digital Simulcast—stepping stone to cable’s all-digital future"
August 18 at 11 a.m. ET
Cost: free
Register online
Sponsored by: EGT Inc., RGB Networks, Motorola Inc., Scientific-Atlanta, Terayon Communication Systems

CTAM New York Blue Ribbon Breakfast:
Grand Hyatt Hotel at Grand Central Station--New York, NY
September 14, 8:00 a.m.
Tel: (212) 367-6921

Broadband Cities 2005:
Salt Lake City, Utah
September 19-21, 2005

DSL Forum Meeting Q3:
Philadelphia, Pa.
September 19-22, 2005

CTIA Wireless IT & Entertainment 2005:
San Francisco, Calif.
September 27-29, 2005

TelcoTV Conference & Expo 2005:
San Diego, Calif.
Nov. 8-10, 2005

Copyright © 2005 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.


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