J:COM Battles Telcos With Advanced Services
By George Winslow -- Multichannel News, 1/2/2008 1:43:00 PM
Faced with an increasingly competitive Japanese pay TV landscape, the country’s largest operator, J:COM has responded by increasing the speed of its Internet product to 160 Mpbs and deploying advanced VOD system with an HTML Web browser that allows the consumer to easily navigate through a larger number of titles.
Those pioneering moves, which J:COM made in the last half of 2007, illustrate strategies that cable operators in some international markets may deploy in 2008 as they face increased competition from IPTV and content delivered over high-speed Internet connections, noted Michael Pasquinilli, Concurrent VP of advanced engineering.
“With the 160 Mbps high speed Internet product we have been successful through 2007 [in getting] subscribers to switch from FTTH and the 100 Mpbs services that major telephony companies provide,” said Tatsuya Yoshihara, deputy general manager of the Service Strategy Division and general manager of the New Technology Department at J:COM.
“These non-TV services bundled with other J:COM services decrease churn rates,” he added in an exchange of e-mail messages. “In 2007, the bundle ratio has been going up and churn rates have continued to go down.”
J:COM’s advanced VOD system is also playing a key role in their strategy. “To compete with this next generation of competitors J:COM wanted an on-demand platform that could easily expand the available content and deploy new features,” Pasquinilli said.
J:COM was one of the first cable operators in the world to deploy set-top boxes with a DOCSIS connection and in June began using Concurrent’s MediaPilot HTML-based VOD application-authoring platform, which makes it much easier for content to added to the system and for users to navigate their way through large libraries of programs.
“Our new VOD system has eased our maintenance labor” and provided more flexibility in the type of new services and the amount of content J:COM can offer,” said Yoshihara. Currently J:COM offers over 11,000 titles in its VOD offering.
One example of that flexibility is its Karaoke product, which initially offered about 600 songs but now has almost 3,000 titles. “The Web browser allows users to very quickly go through thousands of titles,” Pasquinilli said.
The service, which costs $7.15 a month, has boosted subscriber rates and ARPU, Yoshihara added.
The new VOD system’s interactive features also open up new advertising opportunities. “It allows subscribers to watch commercials and order pamphlets through the system for free,” Yoshihara said. “Because this system allows segmented marketing it has been attracting many companies” including Mercedes-Benz.
While some companies are beginning to deploy fiber, Yoshihara argued that “they do not appear to be a threat to us” because they have only been deployed in limited areas and because of some of the advanced products they’ve deployed.
“HFC is more efficient in terms of quality and costs,” he noted. “We also have the last mile for our phone services. This advantage allows us to provide cheaper phone rates than other major telephone companies.”
