xOD Capsule - October 18, 2005

Mon, 10/17/2005 - 8:00pm CED Broadband Direct Current Issue Subscriptions Oct. 18, 2005 Is VOD sexy enough?Despite Comcast's milestone of 1 billion VOD "views" so far this year (see story further below), the achievement was greeted with somewhat of a backhanded compliment last week in the Philadelphia Inquirer. In a story titled "Video-on-demand seen as popular but unexciting," the paper points out how well liked TiVo Inc. is compared to VOD. Forrester Research Analyst Josh Bernoff had this to offer: "People say, 'VOD is great. I like this. But their reaction is not over the moon the way DVR households are." Although Comcast and other cable operators also have DVRs in their arsenals, it's hard to disagree with that statement. There's an emotional imbalance taking place here. Consumers tend to love TiVo, and merely like VOD. So, what gives? As the story rightly points out, VOD (at least in North America) offers a massive library, but lacks access to primetime hits such as "Lost" and "Desperate Housewives." Years ago, the VOD Holy Grail example for primetime television was Seinfeld—and VOD still does not even have that yet. But it could - if cable's willing to play some serious hardball with the programmers. As I mentioned in this month's issue of CED, at least one major cable operator, most likely one with little or no skin in network ownership, is close to re-opening the nPVR concept by allowing customers to record whatever they want (a la the DVR) on portion of the video-on-demand server farm that they can essentially call their own, creating a virtual DVR of sorts. Using an interpretation of the old Sony Betamax decision, the idea is to sell VOD "condos" for a monthly fee. Those customers can then record whatever they want there, just as they would on a personal DVR that sits near the television. Suddenly, hits like "Lost" would no longer be out of reach of VOD. There are big risks with this concept. If something like this went to court and the cable operator lost, its relationship with programmers would be severely damaged. The big question now is whether an operator will be willing to pull the trigger on the "condo" concept, or leverage its mere possibility as a negotiation tactic. —Jeff Baumgartner Tandberg strikes GoldPocket for $78.5 M Tandberg Television made a bigger push into the world of interactive television (iTV) this week with a deal to acquire GoldPocket Interactive in a cash and stock deal valued at $78.5 million. Closely-held GoldPocket develops and markets iTV software creation and management platforms for service operators and content providers. Among recent deals, GoldPocket paired up with HSN on the creation of a 24/7 iTV service that will enable viewers to purchase products via the remote control. CBS tapped GoldPocket earlier this year to build interactivity into several shows, including its popular Survivor franchise. Other big Gold Pocket customers in North America include DirecTV, Fox and Time Warner. The acquisition is expected to shore up Tandberg's iTV software and technology portfolio, and establish itself with television programmers and other content providers. Last year, the company purchased N2 Broadband, a company specializing in video-on-demand backoffice software, for $118 million. Before its foray into VOD and iTV, Tandberg was well known for digital video gear, including encoding gear based on advanced compression platforms such as MPEG-4.GoldPocket, which employs 85 people, will be maintained in Los Angeles when the deal closes in December. Its estimated fiscal year 2005 revenues are $12 million. More on the implications of this deal will appear in next week's edition of xOD Capsule.Portable video goes mainstream Following in the footsteps of the Sony PSP, Apple and EchoStar Communications both launched products that give consumers a way to take their video with them. EchoStar was first with the PocketDISH, a device family that can load and playout a range of digital media, including MP3s, photos and video. On the latter, the player can load shows stored on EchoStar receivers with built in digital video recorders. Using a USB 2.0 connection, 60 minutes of video can be transferred to the PocketDISH in about five minutes. Apple followed with a video-capable version of the popular iPOD…plus a major content deal in tow. The device, which features a 2.5-inch color screen and hard drives of 30 GB or 60 GB, is getting off the ground with a deal with Disney, and downloadable access to primetime hits such as "Desperate Housewives" and "Lost" for $1.99 each. EchoStar's PocketDISH can load up those titles as well, and do so for free, provided the user remembers to record them on the DVR. Despite the features, both product lines are rather pricey. Apple's 30 GB model sells for $299; the 60 GB version goes for $399. EchoStar's top-of-the-line model (7-inch screen) carries an MSRP of $599. The lower end 2-inch model is $329, and the 4-inch model sells for $499. But where is cable in the portable video conversation? The entire industry has been very hush-hush about potential portability plays, but it won't be a big surprise if some operators can get some of the DRM (digital rights management) issues ironed out and have something to say by the 2006 Consumer Electronics Show (CES) in January. But there hasn't been much to talk about since the 2005 CES confab, when Comcast Corp. hooked up with Delphi Corp. (which filed bankruptcy earlier this month, by the way) on system that will enable cable customers to transfer "select" video titles via WiFi to an in-vehicle entertainment system.Comcast: 1 billion served Comcast Corp. reached a significant milestone last week, announcing its customers have viewed more than 1 billion programs on-demand so far this year. The milestone surpasses Comcast's initial expectations that it would serve up 1 billion VOD views for all of 2005. Last year, customers viewed about 567 million on-demand programs. Comcast launched VOD in late 2002 in Philadelphia. The operator presently offers a VOD library of about 3,800 programs, and about 95 percent of those titles are "free," Comcast said. The MSO said movies, music, sports and children's programming are the most popular categories. The most watched free title so far this year is Ciara's "1, 2 Step," which has garnered 3.2 million views. The SpongeBob SquarePants "The Chaperone" episode is leading the children's category with 1.3 million views. "One billion views in less than 10 months proves that on-demand is transforming the way people watch TV," said Page Thompson, VP and GM of Comcast On Demand. Comcast said a "view" is tabulated when a customer selects an on-demand program and that program is later deleted from the saved program file. Trick-play functions (pause, rewind, fast-forward) and restarts are considered part of the original "view."Warner to push VOD usage with exclusive 'extras' Aiming to drive video-on-demand and pay-per-view usage, Warner Home Video will soon add some exclusive extra content that is typically relegated to the realm of the DVD. Starting this December, the company's On Demand division will begin to offer extras, such as facts and figures about particular scenes, for "select" titles. The new "Movies That Pop" segments will also offer information about actors and behind-the-scenes production details. In all, the feature will offer up to 15 minutes of enhanced content at the end of the movie. Warner Home Video said it will make the extras available to nearly 40 million cable and DBS homes. Customers will not be charged extra for the bonus material. On Dec. 3, Batman Begins will become the first Warner VOD/PPV title to offer exclusive extra content. Warner Home Video will release a bonus-filled version of Charlie and the Chocolate Factory on Dec. 23. To draw more attention to its new VOD and PPV releases, Warner Home Video is also distributing two-minute teasers that operators can serve up as "free" VOD. They can also run the teasers on their VOD or PPV barker channels. "This new feature creates another compelling reason for customers to order new releases," said Ron Sanders, EVP and GM, North America, Warner Home Video, in a statement. To hammer home that point, the company cited a recent VOD and PPV awareness and usage study by Synovate that showed that more than 20 percent of respondents would increase their VOD usage if the movies contained bonus materials. Warner will also back the "Movies That Pop" campaign with direct mail, radio and national cable advertising.LodgeNet, Paramount check in with HD-VOD deal Hotel entertainment magnate LodgeNet Entertainment Corp. has secured the rights to offer high-definition films from Paramount Pictures. Under the deal, LodgeNet will use its new "sigNETure" HDTV system to provide on-demand access to hi-def versions of titles such as War of the Worlds and The Longest Yard. The Hard Rock Hotel in Chicago is one of the first hotels to tap the new LodgeNet offering. A LodgeNet spokeswoman said the company has its HD system hooked into about 2,000 rooms so far, and that number is expected to rise later this year as the company installs more sites with the sigNETure system. In all, LodgeNet provides interactive services to more than 1 million rooms and 6,000 hotel properties worldwide. "Through this landmark agreement, LodgeNet is again elevating the guest experience hoteliers are seeking from their HDTV investment by delivering newly released Hollywood movies in true high-definition clarity," said LodgeNet President & CEO Scott Petersen, in a statement. Paramount noted that LodgeNet's content protection system "was key in our decision to authorize distribution of high-definition titles." LodgeNet's HDTV system supports Pro:Idiom, a security platform developed by LG Electronics. LodgeNet also supplies HD fare from HBO and titles originally produced for IMAX Theaters. LodgeNet isn't the only hospitality entertainment firm offering HD fare. Earlier this year, On Command Video Corp. launched a system called HD+. Featuring security from NDS Group, HD+ is compatible with televisions from LG, Panasonic, Philips, Samsung and Sharp. Charter goes multi-room with Digeo Charter Communications has launched a multi-room version of Digeo Inc.'s Moxi Media Center platform in St. Louis. Under the multi-room scenario, the primary, multi-tuner Moxi box uses existing home coax wiring to share applications as well as TV shows and movies recorded on its hard drive with low-cost "Moxi Mate" devices that are hooked into other TV sets. "We've recently deployed multi-room DVR, which extends full Media Center functionality to multiple televisions, including the ability to pause and record live TV and view DVDs in the second room," said Barbara Hedges, Charter's corporate vice president of video product management, in a release. In all, Charter has deployed more than 100,000 Moxi units, and has made the platform available in markets serving north of 85 percent of its 2.7 million digital sub base. Charter is deploying Moxi-powered boxes manufactured by both Motorola Inc. and Scientific-Atlanta. Concurrent completes Everstream purchase Concurrent Computer Corp. has closed an earlier announced $15 million stock deal to acquire Everstream Holdings Inc., a maker of video-on-demand reporting and statistics systems. Concurrent will operate Everstream as an independent, wholly-owned subsidiary, and will maintain operations in Everstream's facilities in the Cleveland area. More than 30 Everstream employees have joined the Concurrent team. We are making changes and additions (including international deployments) to ourWeb-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.Recent Deployments Service operator Market Video server vendor VOD backoffice supplier Movie-on-demand aggregator Asset delivery/ management providers Adelphia Augusta, Maine Broadbus Tandberg InDemand, TVN Tandberg, TVN Canton, Ga. Broadbus Tandberg InDemand, TVN Tandberg, TVN Loudon, Va./Frederick, Md. Broadbus Tandberg InDemand, TVN Tandberg, TVN West Palm Beach, Fla. Broadbus Tandberg InDemand, TVN Tandberg, TVN Comcast South Bend, Ind. Arroyo Video Solutions Tandberg — — Time Warner Cable Portland, Maine Arroyo Video Solutions* Tandberg InDemand Tandberg Wilmington, N.C. Arroyo Video Solutions** Tandberg InDemand Tandberg * Former SeaChange International server market ** Former Concurrent Computer Corp. server market October 2005    Issue Contents >> Company: Rentrak Corp. Headquarters:Portland, Ore. URL: CEO: Paul RosenbaumClaim to fame: In the video-on-demand world, Rentrak markets a data collection, and tracking system (On Demand Essentials) in use today by operators such as Comcast, Bresnan, Cablevision Systems, Charter, and Insight. Recent news of note: Allan McLennan, late of Lumenati/NetTV and Media Station, was appointed president of the company's Advanced Media and Information Division, which operates the company's Entertainment Essentials services suite. Company: Gemstar-TV Guide Headquarters:Los Angeles, Calif. URL: CEO: Richard Battista Company claim to fame: In addition to being the company behind widely-deployed interactive television guide technology, the company also operates an online division, publishing group, as well as TV Guide Channel, an on-demand network called TV Guide Spot, and the TVG Network horseracing channel. For those who travel a lot, you have probably come across a copy of SkyMall, another Gemstar-TV Guide business. Recent news of note: Recent news of note: About 100 TV execs boarded the Queen Mary for a two-day workshop on the history and future of the television industry. Interactive '05—istart Developer Conference Atlanta, Ga. Oct. 20-21, 2005Registration information Telecom '05Las Vegas, Nev. October 22-26, 2005 Information CED Webcast:"Gearing up for PacketCable Multimedia " Oct. 27, 2005Cost: Free For registration or informationSponsored by CableMatrix, Camiant, Motorola, Sandvine TelcoTV Conference & Expo 2005: San Diego, Calif. Nov. 8-10, Cable TV & Broadband Expo 2005Location: Exclusively on the Web Dec. 7-8, 2005 You are receiving this email because you have either requested a newsletter or a magazine from Reed Business Information. You are currently registered to receive this newsletter as: [] Unsubscribe | Change your Profile/Update Email Address Print Subscriptions | Email Subscriptions | Privacy Policy| Online Support You may view an online copy of this newsletter at CED Magazine's Web site. Copyright © 2005 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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