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Former FSN Execs Enter VOD Business

6/07/1998 8:00 PM Eastern

As prices have dropped, companies like Prasara Technologiesare returning to VOD, despite the empty promises of the mid-1990s.

Prasara's credentials are a bit different: Its topexecutives include three former principals of Time Warner Cable's video-on-demandproject as part of its Full Service Network in Orlando, Fla.

Prasara (which means "communication" in Hindi andSanskrit) is the newest kid in the expanding neighborhood of true VOD-service providers,the sights of which are set firmly on the $16 billion video-rental and sales industry.

The fledgling company said it is in discussions withseveral MSOs and digital set-top manufacturers, such as Scientific-Atlanta Inc. andGeneral Instrument Corp. Its pitch: the combined experience of three former FSN executives-- Robert Montgomery, Praveen Rao and Scott Wilcox.

"We knew after FSN's demise that the cableindustry was moving in this direction, and I think that our time at FSN made us experts atdeploying full-service TV," said Montgomery, vice president of business developmentfor Prasara.

Rao brings a strong computer-software-developmentbackground to Prasara after spending three years at CCH Inc., a Chicago-based publishingcompany. Wilcox's resume includes a 15-year stint at Southern New EnglandTelecommunications Corp.

Montgomery spent four years with Time Warner and eightyears with Home Shopping Network.

The trio's diverse backgrounds are reflected inPrasara's varied client list, which includes S-A, Concurrent Computer Corp., PioneerNew Media Technologies, Sprint Corp., MediaOne and Mattel Corp.

"We felt that VOD was not just a technology, but abusiness. It's a new industry, and no one has done this in a commercial way,"said Rao, Prasara's vice president of software development.

Prasara provides software and content development; creativeservices; strategic and database marketing; network and ITV programming; and broadband,two-way systems integration, design and management.

"We build the software thread that strings the wholesystem together," said Wilcox, the company's vice president of technology, aboutan open system of tools that operators can use to contain costs.

Like other VOD providers, Prasara's "InteractiveTelevision Control and Management Software" (ITV) system would allow subscribers24-hour-per-day, instant access to movies-on-demand, with VCR functionality.

Yet what separates the company from the rest of the field,Rao insisted, is the technical and business mix of the three principals and their historywith FSN.

"We didn't want to just throw [VOD] away andstart a new life. There is a business in it, and customers loved it," he said.

Prasara's strategy is to take the path of leastresistance. Wherever set-tops are being deployed, they'll be "aggressive, butselective," Montgomery said.

Prasara, he added, is expected to be part of fourcable-system VOD-trial deployments this year -- a trend that he sees continuing. "Weknew that broadband media would be deployed: We just didn't know when,"Montgomery said.

The initial VOD surge has prompted Prasara to seek otheropportunities in the interactive-television business, as well, such as for hospitals,hotels and food services.

Cable operators are beginning to inquire about VOD, Raosaid, and the answers that Prasara is giving them are driving the company'snew-business strategies. "They're asking us what the industry needs and where itwill make its money. VOD is great, but there's a whole other set of revenues, likefood-service applications," he said.

Prasara's plan, Rao continued, is to help operatorssave their top-tiered customers from direct-broadcast satellite.

"How can operators keep those customers satisfied?Once VOD is added, they'll need more than just digital. That's where foodservice, banking and ad sales come in. They will generate new revenues right away."

However, the company and its principals have no illusionsabout the challenges that lie ahead.

Concluded Wilcox: "We can't come in with too higha technical solution. We must be simple. That's our advantage."

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