News

MSOs Unfazed by Diva Woes

5/31/2002 10:03 AM Eastern

Cable operators that use Diva Systems Corp.'s technology to power
video-on-demand weren't exactly caught unaware when the company filed for
Chapter 11 bankruptcy and announced plans to sell most of its assets to
Gemstar-TV Guide International Inc. -- and they aren't expecting the development
to damage their rollouts.

Insight Communications Co. Inc., Charter Communications Inc., AT&T
Broadband and other MSOs have recently forged backup deals to support their VOD
rollouts.

In the short term, they plan to maintain their Diva systems even after the
company becomes part of Gemstar.

While Gemstar has indicated that it has no intention of getting into the VOD
business once it acquires Diva's technology and assets, Insight CEO Michael
Willner said arrangements have been made to have it service Insight's Diva
software systems.

Insight had already purchased its VOD servers from Diva, so they will be
staying put, Willner noted.

For its future rollouts, Insight will obviously seek other VOD providers,
Willner said.

On the content side, Insight has already forged a delivery deal with TVN
Entertainment Corp. It will acquire the programming itself, either through TVN
or directly from studios.

A Charter spokesman said the MSO bought and installed different VOD
technology several months ago in case it needed to make a quick switchover. But
it plans to continue to use the Diva hardware and software in the
short-term.

In April, Charter announced a server deal with Concurrent Computer Corp. to
provide VOD servers in an undisclosed number of markets.

For content, the MSO also said it has been negotiating directly with
providers including Hollywood studios, as well as third-party content
aggregators.

Meanwhile, AT&T Broadband will work with Diva to continue supporting its
VOD rollout in Atlanta and Los Angeles, according to spokesman Tracy
Baumgartner.

Last month, AT&T Broadband forged a content deal with In Demand LLC, and
that fare should be available in the coming months.

Want to read more stories like this?
Get our Free Newsletter Here!