Although the cable industry descended on Atlanta last week for its annual confab, DVR pioneer TiVo Inc. ended up as the big winner, seemingly securing itself for the long-run…or at least long enough for the long-rumored buyout to occur.
TiVo basically hit the trifecta last week, scoring in DBS, cable and in the courtroom. The quick rundown:
- Likely the most important thing to happen that will affect TiVo's short-term success is its three-year extension with DirecTV. This will ensure that TiVo can continue to gain customers from the DirecTV pool, which historically proved by far to be the best in which to fish for new TiVo customers. The bulk of TiVo's 4.4 million subs (as of Jan. 31, 2006) are from its relationship with DirecTV, which has added a second DVR service/software option from corporate cousin NDS Group.
- In a Texas courtroom last Thursday, TiVo came away the winner in its lawsuit with EchoStar Communications. A jury awarded TiVo almost $74 million, finding that EchoStar's "homegrown" DVR platform actually infringed on a TiVo patent. TiVo is now seeking an injunction against EchoStar and its DVR products. For the record, EchoStar said it believes the initial jury decision will be reversed on appeal, and that it "looks forward" to its DVR patent case against TiVo in Feb. 2007. If TiVo turns litigation toward cable, at least one MSO - Comcast Cable -- should be out of harm's way, having already signed a deal to offer TiVo products. TiVo's win against EchoStar may bring more cable operators to the deal table.
- Speaking of cable, TiVo made some other strides there as well, notching "Digital Cable Ready" (DCR) "verification" from CableLabs. The green light means TiVo can build and deploy digital video recorders that support the CableCARD, and can therefore support digital cable programming (one-way, for now) without a separate set-top. Presently, TiVo DVRs can change channels on cable digital set-tops through clunky IR blasters that don't work anywhere near all the time.
While this news was good for TiVo's stock price, it also rekindled speculation of a sale or takeover. An article in Barrons, for example, noted that, despite a solid week, a "buyout may in fact be the best exit strategy for TiVo."
— Jeff Baumgartner, Editor in Chief, CED magazine and xOD Capsule
Panel sees VOD helping with churn…and much more
Atlanta —Video on demand is more than just a popular service - it's a means of dramatically reducing churn, a pathway to new ad revenue, and could be positioned as another step toward anything-anytime-anywhere content delivery, according to panelists during the "Served Fresh Daily: The On Demand Revolution" session here at The National Show.
"Once consumers experience it, it's transformational," said Marvin Davis, Comcast's marketing SVP. "Their satisfaction goes up, and churn goes down. Usage is increasing, and the business numbers are going up with it."
Addressing worries that VOD cannibalizes other services, Gregg Hill, president of Rainbow Network Sales, said VOD instead works synergistically with other services, increasing demand for all.
He explained that Cablevision owns the Independent Film Channel. IFC has an arm that produces films ("My Big Fat Greek Wedding," "Y tu Mama Tambien"), and another that runs theatres. He said the company is releasing films simultaneously in theatres and on VOD, "and the results have been great - even before we started marketing it. Is it huge? No. Is it worth it? Yeah! We get it to people who otherwise can't get to the theatre."
Peter Stern, Time Warner Cable's EVP of product management, talked about the MSO's "Start Over" service, which is presently being offered in the operator's Columbia, S.C., system. Any digital subscriber can simply restart a program from the beginning - complete with commercials.
"It's VOD, but it doesn't feel like it," he said. "Satisfaction is off the charts," he added, noting that 70 percent of the people to whom it's available have used it, and each person who uses the feature uses it about seven times a month each. "They're tuning in three times longer than they did with linear programming," Stern said.
Mike Pohl, president of C-COR Global Strategies, touched on the vendor community's readiness to enable on-demand advertising - the ability to target customers, and to provide additional ad information at subscribers' request. "It's just a matter when the market is ready for it," he said.
The market might be ready. Pohl cited statistics that over 60 percent of people say they would prefer not to pay for a VOD program and watch accompanying ads, rather than pay to watch an ad-free version.
Ryan O'Hara, President of the TV Guide Channel, said the trick is finding an acceptable way to monetize ads.
Davis said the options for providing advertising in the VOD space are bewilderingly many. "We're going to need a new rate card," before moving ahead, he said. "The dollar signs in our eyes can't overwhelm the experience."
The cable industry better be ready, though, O'Hara said. "VOD is at five percent penetration now. As it goes to 10 percent, 15 percent, 20 percent, advertisers will follow." — Brian Santo, Senior Editor, CED
Arroyo beefs up nPVR platform
Arroyo Video Solutions has implemented some enhancements to its nPVR (network personal video recorder) software designed to beef up ingest rates and storage densities.
Arroyo, which is supplying the servers for Cablevision Systems Corp.'s "RS-DVR" trial in Long Island, said its latest entree can simultaneously ingest 4,000 channels of MPEG-2 video (at 3.75 Mbps) in on rack of servers, equal to about 100 channels of ingest for every 1.75 inches of rack space.
The company's nPVR platform also supports up to 60,000 hours of SD storage per rack, and features failover capability.
Ingest and storage are two "critical" metric points for the nPVR, explained Arroyo President & CEO Rick DeGabrielle.
Another key element is latency - the amount of time a task (such as pausing a program or enlisting another trick mode) takes from the moment the customer pushes the button of the remote. The latency for Arroyo's nPVR system is about 300 milliseconds, DeGabrielle said.
RealNetworks OK for 'OCUR'
CableLabs has approved a digital rights management (DRM) system from RealNetworks Inc. for the OpenCable Unidirectional Receiver (OCUR), a platform that enables digital cable video programming - including premium services and high-definition television content - to be delivered to PCs over high-speed connections and without the need for a separate set-top box.
The approval will give PC manufacturers the ability to build OCUR-based devices that incorporate Real's universal Helix DRM platform. OCUR-enabled media center PCs will be equipped with a CableCARD slot. A CableCARD supporting the operator's conditional access system will be required to authorize digital services on the PC.
Because OCUR is inherently one-way, it will not support video-on-demand. Evolving platforms based on a cable industry-backed Downloadable Conditional Access System (DCAS) will be able to handle interactive digital cable services.
CableLabs approval should push Real's cable IPTV agenda forward. Among earlier work, Real's DRM - as well as its media player and streaming servers - is supporting a "Broadband TV" trial in the San Diego area launched last summer by Time Warner Cable that delivers the operator's expanded basic tier (about 75 channels, but no premium services) via IP to the PC.
"This DRM solution provides a secure environment while guaranteeing a high-quality customer experience. We hope this will lead to a competitive marketplace for secure DRM technologies," said Time Warner Cable President & CEO and CableLabs Chairman Glenn Britt.
PC makers and cable operators already have multiple vendor options in this area, as RealNetworks marks the second company to win the OCUR seal of approval. In November 2005, CableLabs awarded OCUR approval to the Microsoft Corp. Windows Media Digital Rights Management (WMDRM) platform.
SeaChange mobilizes mobility demos
SeaChange International had an interesting demonstration at last week's National Show in Atlanta that showed several mobile media devices - among them, the Apple video iPod and Sony Playstation Portable (PS) - hooked directly into the video-on-demand system through IMS (IP Multimedia Subsystem), a key element of the newly issued PacketCable Release 2 specs from CableLabs.
Using IMS as the backdrop, the demo featured SeaChange's Axiom backoffice system and the company's QuickSilver Content Composer.
Disney-ABC puts primetime online
The broadband plans of Disney-ABC Television Group blossomed a bit last week when the company announced it would offer ad-supported, full-length episodes of "Lost," "Desperate Housewives," "Alias" and "Commander in Chief" for free as part of a two-month trial at www.abc.com.
Rather than a download model, Disney-ABC said it will stream the titles during May and June.
To help pay the freight, the content giant has secured several big name advertisers, including AT&T, Cingular, Ford, Procter & Gamble, Toyota, Unilever's Suave, Universal Pictures and corporate cousin Walt Disney Pictures.
Separately, the group on Monday (4/17) launched SOAPNETIC, a "gated" broadband channel dedicated to soap fans, calling it an extension of the linear SOAPnet channel. Initially, the new service will be offered to Verizon broadband customers.
On Command puts Stern on-demand
On Command Video Corp. has inked a multi-year deal with iN DEMAND Networks to offer on-demand access to recent shows from Howard Stern's "Howard TV" service, which features video of the shock jock's morning satellite radio program on Sirius.
On Command delivers services to more than 1 million guest rooms.
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