Another View: Studio Deal Step in Right Direction

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Cable operators attending the CTAM Digital & PPVConference two weeks ago were eager to hear about the very real revenue prospects fornear-video-on-demand and VOD in the digital world

But many operators were just as fervent to hear what thestudios were prepared to do to support the potentially lucrative new PPV industry. Cableexecutives had been hearing for a year about an unprecedented, unified studio marketingeffort for PPV, combining the resources of the major Hollywood studios to help brand thetroubled genre.

The New Orleans conference served as a platform foroperators to eyeball the campaign's creative and to find out exactly how the studioswere going to help their business.

Despite the lack of details emanating from the studios atthe conference, the operators did take home one major message from Hollywood: The studiosbelieve in digital PPV.

Only a groundbreaking shift in the way that PPV is packagedand delivered to consumers would forge a union of eight studios, each with their ownseparate agendas and their own levels of frustration with how the PPV business is run.

It's no secret that the studios are not major fans ofthe inconsistencies and poor performance of analog PPV. Given that cable'scompetition -- direct-broadcast satellite services -- generates about 65 percent ofHollywood's PPV revenue, it's not hard to understand the studios' waryattitudes toward cable.

But the studios are not blind: They see the same potentialfor NVOD and VOD to be the biggest addition to their bottom lines since home video -- astagnant category. Initial NVOD results have encouraged studios and cable operators alike.

Already, systems with NVOD are generating buy-rates as muchas 10 times those of analog PPV. The new digital boxes provide everything that the studioshave been asking for from cable: more runs for hit and library titles, at more convenientstart times, with better picture and sound quality.

Now it's time for Hollywood to step up to the plate.Industry sources estimate that the studios could ante up as much as $10 million inpromotional value touting the merits of digital PPV. The studios are also looking withintheir ranks for a popular movie personality to relay digital PPV's message to theconsumer.

It's unclear when the campaign will begin, or whetherit will be targeted strictly to digital PPV or wide-ranging enough to encompass analogPPV, as well.

What matters most, however, is that the studios finally seePPV as a major revenue source in the future, and possibly as a successor to the home-videobusiness as its most lucrative cash cow.

Once that happens, who knows what's next? Maybe thestudios will even shorten their windows to cable operators.

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