Cable Operators

The Evolution of VOD

4/03/2005 8:00 PM Eastern

Sometimes, you work really hard to create a new service or technology, spending years on development, testing, then marketing and refining the product, and it takes off like a rocket. For those of you who worked on high-speed Internet access, take a bow.

Sometimes, you work really hard to create a new service or technology, spending years on development, testing, then marketing and refining the product, and it crashes and burns. You walk away battered and bruised, but hopefully wiser from the experience.

And sometimes, you work really hard to create a new service or technology, spending years on development, testing, then marketing and refining the product, the results come in and you’re not sure what you’ve got. There’s some progress, some positive feedback from subscribers, some back slapping from Wall Street, but you’re left with a semi-hollow feeling. You know you haven’t hit a home run, but you’re at least on base and in the game.

That’s what video on demand feels like, circa April 2005. A service that is progressing in fits and starts, exemplified by a batch of new content here, a drive for more deployments there, increases in usage over here, advancements in technology and measurement platforms over there.

The stories in this issue reflect VOD’s dogged evolution.

On the programming side: Rainbow Programming is readying a nationwide rollout of IFC On Demand, and has plans to launch WE: Women’s Entertainment and AMC On Demand later this year. All Rainbow VOD content will follow CEO Josh Sapan’s mantra of original product on VOD.

Three programming fiefdoms within The Walt Disney Co. — ABC, Disney Channel and ESPN, are jointly preparing a new VOD package. It includes lots of children’s programming that is a perfect no-brainer for VOD, even if it’s the same content on-air, because kids will watch the same programs over and over again.

The package also may contain condensed college football and basketball games from ESPN, a la the popular NFL On Demand service.

Starz On Demand has tweaked its service to take monthly premieres and debut them on subscription VOD, before their linear launch dates. It’s a nice benefit for VOD platforms.

Cablevision Systems Corp., always on the forefront of new-service deployment, has launched a highly popular auto classified VOD service on its iO: Interactive Optimum platform, and it leads the industry with the most separate SVOD programming options.

Turner Classic Movies continues to look at adding an on-demand service to its arsenal.

It’s clear that while many major programmers haven’t necessarily embraced VOD like they’ve embraced digital, they aren’t running away from it either. True, they want to be fairly compensated, and they may not provide — or be able to offer — their absolute “best” product in some cases. But it’s one more step in the right direction.

Rentrak has signed its fourth MSO (Charter Communications Inc.) for VOD viewing statistics, giving it close to half the industry. And Comcast Corp. has begun sharing its VOD-usage data with content providers. This is another important step, because it provides programmers with feedback on what’s working, so they can provide even more appealing content to VOD. It also moves VOD one step closer to a legitimate advertising model.

Some revolutions don’t happen overnight. In fact, those that take years are better described as evolutions, which is squarely where VOD is today. There is enough momentum to keep it going in the marketplace. Comcast and its chairman and CEO, Brian Roberts, will see to that.

But the full vision of VOD, at least in Roberts’ mind, will likely take several more years to develop, requiring better content, a viable measurement system that produces ad dollars, improved economics as systems and content scale, and more ubiquitous coverage as low-cost digital set-top boxes become common in a digital simulcast and all-digital era. It will likely take most of the remaining decade to get there.

But if the industry remains patient about expectations, works with other industries that have a vested interest in VOD, and remains steadfast to the product roadmap spelled out by its leaders, it can make VOD one of those TV-viewing changing experiences. And the multichannel business will have another home run on its hands.

September
October