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AOL Time Warner Inc.'s newly minted interactive-video division bolted from the blocks with the goal of raising the bar on the on-demand concept.

Blending a wide array of content with technical know-how, the division plans to hasten the growth of video-on-demand, subscription-VOD and other advanced applications such as IP telephony, personal video recording, multiple ISP access and targeted advertising.

Former Time Warner Cable CEO Joseph Collins took the helm of the division as chairman, and Jim Chiddix, Time Warner Cable's former senior vice president of engineering and technology and chief technical officer, has risen to president of the unit's Interactive Personal Video Group, and is heading those activities from New York.

Chiddix said his division will continue to focus on VOD and SVOD technologies, but also take an even closer look at headend-based PVR applications and services. At the same time, the company will continue to pursue host-based PVR storage, including integrated set-tops and sidecars.

"You can do a lot with a set-top with a hard drive, but there are limitations," Chiddix said. "The network-based approach is potentially much more powerful, and has the ability to provide the service to all of our digital set-tops."

Chiddix's group also will iron out scaling issues that have emerged with network-based PVR applications. Earlier this year, Time Warner Cable launched an HBO SVOD trial with 26,000 subscribers in Columbia, S.C., and high subscriber demand wreaked havoc on the set-top/headend management systems, causing the operator to trim the number of trial participants. Chiddix insists that the problem can be solved with additional software.

Separately, AOL-TW's interactive-video unit will work on an enhanced version of the AOL TV service.

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