xOD Capsule Newsletter - February 28, 2006

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February 28, 2006

Jeff Baumgartner New 'over-the-top' entrant…DirecTV?
Does anyone have a problem with DirecTV's most recent plans for video-on-demand?

In addition to what amounts to a "push" DVR service (ie. selling movies and other high-value content that are broadcast and recorded to partitioned segments of receiver hard drives), DirecTV said last week that it is also exploring a VOD system that enlists set-tops outfitted with high-speed Internet ports for video downloads (and perhaps video streaming, too).

While those plans certainly dovetail with the DBS giant's designs on creating a wireless broadband services (possibly using WiMAX in cahoots with fellow DBS service provider EchoStar Communications, it doesn't take a huge stretch to believe that DirecTV won't mind a whole lot if its customers use high-speed DSL or cable lines to pipe revenue-driving content to this new breed of receivers.

Cable operators, already living with the realization that cable modems and high-speed data services are fueling competitive but still smallish over-the-top video service providers, may soon find themselves also providing a helping hand to its biggest rival. So again, does anyone in the cable industry have an issue with this potential development, which will only further spur the debate on so-called "Network Neutrality"?

— Jeff Baumgartner, Editor in Chief, CED magazine and xOD Capsule

Ops gearing up for VOD 'condo' trials
Last October, we introduced the emerging concept of video-on-demand "condos," a network video recorder (NVR) technique that interprets the copyright issues brought up in the old Sony Betamax case.

Under such a scenario, a cable operator would lease out space on the server farm and allow customers to record whatever they want there. It's essentially taking the in-home DVR concept and placing it on the network. In this case, each subscriber condo would provide in the range of 40 to 80 gigabytes of storage.

According to Rick DeGabrielle, the president & CEO of Arroyo Video Solutions, the idea is ready to move well past the concept stage and out into the field. He said his company is already involved in three such trials this year, which will certainly test the tolerance of networks and studios.

One can image that if Arroyo, a relative VOD startup, is involved in some of these early tests, that there are many more gearing up with some of the sector's market share leaders.

On Monday (Feb. 27), Cablevision Systems noted that it is nearing readiness of a network-based DVR, but was short on details.

Despite its interpretation of the Sony Betamax case, the rented server space concept may not be the most efficient in terms of technologies and finances. For an in-depth analysis of how that approach to the NVR stacks up against the others, please check out what industry engineering vet David Large has to say about it in an article that appeared in the February issue of CED.

Survey: VOD & DVR a recipe for happier, more loyal cable subs
Video-on-demand (VOD) and digital video recorders (DVRs) may give cable operators the tasty Reese's-like combo they've been looking for.

Nearly 75 percent of cable VOD subs who also have a DVR supplied by the operator "strongly agree" that their service is better because they have both services, says Leichtman Research Group Inc., citing results of a survey of 1,400 homes in four U.S. markets where VOD is available.

Showing further evidence of the strength of a VOD/DVR combo, a mere 15 percent of those surveyed said they felt that they didn't need a DVR if they had VOD, and 19 percent with a DVR said they didn't need VOD.

The combo also serves as a handy retention tool. According to LRG, 14 percent of the cable subs surveyed said they are likely to switch to another provider in the next six months, but fewer than 6 percent with VOD and DVR said the same.

LRG also found that those who take VOD and DVR also spend more on cable services—about $76.65 per month, or 43 percent above the average. About 78 percent of that group also gets high-speed Internet from the cable operator.

Despite what Apple's strategy with iTunes might suggest, there seems to be limited interest in primetime VOD. LRG noted that just 16 percent of VOD users surveyed said they would be "very likely" to pay 99 cents for on-demand access to a primetime show.

With digital penetration deepening, consumers are also growing more accustomed to serving up content on-demand.

"Usage of VOD services continues to grow, with between 55 percent (to) 83 percent of digital cable subscribers having used VOD in the four markets that were studied," said LRG President & Principal Analyst Bruce Leichtman, in a statement

Real estate app nets eyeballs
Cablevision Systems Corp. digital subs are browsing more than the traditional channel lineup these days. New figures show that many of them are also using their remotes to virtually browse homes as well.

Optimum Homes appCablevision said its interactive real estate channel drew about 100,000 unique visitors in January. The group also viewed more than 5 million pages and spent more than 17 minutes on the service, which Cablevision offers on channel 606.

The ad-revenue driven Optimum Homes service (also offered via the Web) is available to the MSO's iO digital customers and features "tens of thousands" of real estate listings for sale or for rent in the New York metro area.

In addition to traditional home specs, the app also provides open house info, agent listings and details about the surrounding neighborhood. Additionally, subs can tap a "Member Center" to build a home profile and to receive e-mail alerts when desired properties come on the market.

The interactive real estate service follows Cablevision's Optimum Autos offering, which features about 50,000 car listings from 300-plus dealers in the region, and is available on channel 605.

Heard On The 'Net

'Conviction' gets iTunes debut
NBC is testing the early window waters with "Conviction," which is debuting
on Apple's iTunes service (for $1.99 per episode) ahead of its traditional TV premier on March 3. Apple just announced iTunes has downloaded more than 1 billion songs.

Google boots up National Archives
Google has begun testing a free National Archives video project. Just the home page alone offers access to north of 250 titles from the NASA Office of Public Affairs (circa 1962-1981), and several United Newsreel titles from the World War II era.

We are making changes and additions (including 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.


March 2006
Issue Contents »

Company: Itiva
Headquarters: Henderson, Nev.
CEO: Michel Billard

Claim to fame: Full-screen Internet video via "Quantum Streaming," a technology that breaks content into pieces (smaller than a Web page, the company says) over available bandwidth, and reassembles them at the viewer's PC.

Recent news of note: The company demonstrated a hi-def (720p) movie trailer at 5.5 Mbps.


Company: YES Network

Company claim to fame: Televises New York Yankees and New Jersey Nets games, as well as other sports events and "classic" sports footage.

Recent news of note: Hooked up with DirecTV and to offer interactive television content, including updated stats and box scores, starting in July 2006. The service will also feature a "StarCam," which focuses on a particular player each inning.


CTHRA Spring Symposium
March 9, 2006
San Diego, Calif.
More information: Click Here

Las Vegas, Nev.
March 19-23, 2006
More information: Click Here

Profitability Assurance 2006

San Diego, CA
March 22-23, 2006
More information: Click Here

Internet Home Alliance
Spring 2006 Collaborative Research Planning Conference
March 29, 2006
Orlando, Fla.
More information: Click Here

NCTA National Show
April 9-11, 2006
Atlanta, Ga.
More information: Click Here

ACA Washington Summit
American Cable Association
May 8-9, 2006
Washington, D.C.
More information: Click Here

SCTE Cable-Tec Expo
June 20-23, 2006
Denver, Colo.
More information: Click Here

2nd Annual C-COR
Global IP Summit

June 28-29, 2006
Athens, Greece
More information: Click Here

Copyright © 2006 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.


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