Comcast Marshals Forces For On-Demand Campaign
By MATT STUMP -- Multichannel News, 11/4/2001 7:00:00 PM
When Comcast Corp. announced early this year that it would endeavor to launch video-on-demand to more than 2 million subscribers in eight to 10 markets by year-end, the MSO knew it was in for a large, complex integration task.
In fact, it is a task that no MSO has ever faced. Comcast must work through seven different combinations of server vendors, set-top manufacturers, billing systems and interactive program guides so the technology will work in the vast majority of its systems.
And most of that work has been done, or will be successfully completed in the weeks ahead, according to the Philadelphia-based MSO.
"We have done the most potential different variations of this, but you need to launch it across the platforms as they exist," said Comcast vice president of digital television Mark Hess.
For Comcast, that involves nine vendors across four different categories. The upshot is that the MSO has or is about to launch VOD in Willow Grove, Pa.; Monmouth, N.J.; Union, N.J.; Mobile, Ala.; Savannah, Ga.; Baltimore; Harford and Howard counties, Md.; Alexandria and Arlington, Va.; Albuquerque, N.M., and various southern New Jersey systems that were part of Garden State Cable.
By year-end, Comcast's VOD rollouts will rival only those of Charter Communications Inc. among cable companies.
"While this business starts with movies-on-demand, what we're teaching ourselves as an organization is how to take our core product — video — and change it from a broadcasted product to narrowcasted product," Hess said. "That's a huge endeavor.
"It's a new way to look at how our networks' work. It's a new way for our CSRs and our technicians to understand how our product is delivered and, eventually, it will be a new way for our customers to understand how they can get to our product."
He added: "The more we narrowcast, the better advantage we have over satellite. We don't have a one-size-fits-all network out there. This work would have had to have been done sometime."
Two years ago, Comcast was relatively bearish towards VOD, concentrating its research-and-development and operational efforts on rolling out digital set-tops and cable modems. But a year ago — as the base of Motorola DCT-2000 and Scientific-Atlanta Explorer 2000 series set-tops grew beyond 1 million homes — senior executives began preparing to launch VOD.
Early last month, Comcast CEO Brian Roberts reiterated to investors that the MSO would complete integration work that would give Comcast 1.2 million VOD-ready homes by Oct. 31 and 2 million homes by year's end.
"Most if not all the boxes can be enabled on day one," Roberts said.
"We're making slow but steady progress" on the content front, Roberts said, citing In Demand's movie deals with Sony Pictures Entertainment and Universal Studios. Those pacts would cover than 200 titles, in addition to 379 titles from available from Intertainer Inc.
"We're actively trialing SVOD with Showtime, HBO [Home Box Office] and Starz Encore [Group LLC], Roberts added. Tests are underway in Willow Grove, Pa.; Mobile, Ala.; and Alexandria and Arlington, Va.
"This is a fantastic quantum leap forward for the consumer," Roberts said of VOD. "If it keeps the digital momentum going, it will pay for itself."
The technology could drive digital penetration another 10 percentage points or more, in Roberts's view.
"We're hopeful this will make digital stickier," added Comcast executive vice president of sales, marketing and customer service David Watson. So far, he said, the results are "very encouraging."
To reach its goal, Comcast set out to complete seven integration projects. To date, five have been completed: SeaChange International Inc.-Motorola Inc.-Cabledata-Gemstar-TV Guide International Inc.; SeaChange-SA-Cabledata-SARA (S-A's internal guide); Concurrent Computer Corp-Motorola-Cabledata-TV Gateway; Concurrent-SA-Cabledata-SARA; and Concurrent-Motorola-Convergys Corp.-TV Gateway.
Two other combinations — Concurrent-Motorola-Cabledata-Gemstar and SeaChange-Motorola-Cabledata-TV Gateway — are near completion, Hess said.
Comcast began work by making its network interactive, working with Motorola Inc. and S-A, said Hess. It then conducted streaming tests with S-A and Motorola set-tops before working on server, guide and billing-integration issues.
S-A's guide is already integrated into the set-top. With Motorola, integration with TV Guide was completed over the past two months. That integration work now awaits certification at Motorola's lab, Hess said, "then it comes to our labs."
"Then we'll do our famous 40-box test to handle 40 simultaneous orders," Hess said. Comcast is building its VOD systems based on a 10-percent rate of simultaneous usage across an average of 400 digital homes in a node.
"Then we'll put in places where we have backup controllers and headend equipment" and test it before launching VOD service to employees and friendly customers, Hess said.
"With S-A, one of the big things was getting the right code on the controller that could handle VOD," Hess said. S-A's system in Time Warner's Columbia, S.C., shut down this summer, after a free HBO SVOD test generated thousands of requests in a matter of hours. S-A has since written new software code to handle large volumes of "session" orders for VOD.
"We all learned a lot with what happened with Time Warner in Columbia," Hess said. "We were able to take a deep breath."
Operators have historically built VOD models with 10-percent simultaneous usage rates and perhaps one order per two-hour period. But with SVOD, users might begin four or five sessions in a two-hour period, perhaps unsure whether they've seen a certain episode of The Sopranos, or because they are looking for something to watch. That behavior, which is showing up more and more in SVOD, led to the problems in Columbia.
Hess points out that a VOD user who goes through four movie trailers means they are setting up four streaming sessions in the system, which effects the server, streaming path, billing and bandwidth management systems.
"We have thought about that and tried to plan for that when we do SVOD," Hess said. One idea is to limit SVOD to smaller geographic areas in the system or limit it by level of customer. "You learn first, then you decide what you need to do in terms of stream capacity, server capacity."
POST-COLUMBUS CAUTION
Comcast is testing S-A's new software, upgraded to handle more traffic from its network controller, based on its Columbia experience. "Before we do a full scale launch of any SVOD product, we'd have that upgraded software in there. The new software upgrade is critical."
By vendor, about half of Comcast's VOD launches will be on S-A, the other half on Motorola. The S-A markets will use S-A's embedded guide. Most of the Motorola markets will use TV Guide, but there will be some TV Gateway launches, Hess said.
Four of the eight initial markets will carry content from Intertainer Inc., in which Comcast holds a small minority stake. In Demand — another outfit that Comcast owns a piece of — will provide content in four other markets.
Much of the work in the 10 markets up and running or about to be launched now falls in the lap of Watson's marketing group.
"We've done it," he said. "We've crossed the finish line."
By year's end, 500,000 Comcast digital subscribers across a 2-million-home base will be able to order VOD, Watson said.
Movie prices will be on par with pay-per-view, he said. Sometime next year, Comcast will look at creating packages of product, such as a tier of family content, he added.
"We're still in the early innings of where this product can take us," he said.
"The key is to make sure our packaging is simple," Watson added. "We can't get ahead of the customers."
Comcast's initial VOD marketing efforts will employ cross-channel spots, with more specific promotions to come over the next several months, said Watson.
VOD promotions also will appear in direct mail pieces and in Comcast's print guide. SVOD, which is currently being tested, will be launched commercially by year-end, Watson said.
Comcast will test several prices, Watson said, but will use "as much content as we can get" at launch, he said.
