Cablevision Systems Corp., which sports the widest amount of deployed video-on-demand content as part of its iO: Interactive Optimum service, has reported strong buy rates for subscription VOD and VOD hit movies in the nine months after its launch.
"We're very satisfied with the level of subscribers to SVOD," said Kristin Dolan, vice president of digital product management.
On-demand packages from Home Box Office, Showtime and Independent Film Channel — part of Cablevision's Rainbow Media network stable — are available for $4.95 a month as part of the iO service. "They are doing very well," Dolan said.
Hit movies are doing well too — even at $4.95 per title, $1 above the industry norm.
"We've had months where new movies on VOD are outperforming the same title on pay-per-view 13 to 14 times," Dolan said. "Having the functionality and having it on demand does provide enough value."
Indeed, Dolan said the replay of World Wrestling Entertainment's Wrestlemania
on VOD generated 20 times the amount of buys than the original pay-per-view event.
As of March 31, Cablevision counted 24,100 subscribers to its digital iO service. But that number is expected to rise when the MSO announces its quarterly earnings in the next few weeks, and the company projects it will have 125,000 to 150,000 subscribers by year's end.
Dolan said two-thirds of iO subscribers are using VOD each month, accessing free or paid-for content an average of nine times per consumer.
The digital service carries 1,000 hours of programming. The basic VOD platform includes Mag Rack, Rainbow's specialized on-demand video magazines; Fox TV's 24
and FX's The Shield; and 30 to 50 hours per week from New York's PBS outlet WNEW, plus other programming.
According to Dolan, the PBS material is refreshed on a daily basis, while the 24
and The Shield
episodes were seen earlier this year on their home outlets.
"We've also tried a few different things," she said. "The first goal is to get people comfortable with the service."
Cablevision has carried classic tennis matches from past Wimbledon (via Turner Sports) and the U.S. Open (via ESPN) tournaments while the current tournaments were in progress.
The company also has 17 interactive virtual channels where on-demand content sometimes appears, Dolan said.
That includes Rainbow's MuchMusic USA network's "Oven Fresh" virtual channel, which allows users to vote for their favorite music video each week. And Rainbow's News 12 provides interactive and local news stories on demand. "You can create your own newscast," Dolan said.
Subscribers also can access several different camera angles during home games of Major League Baseball's New York Mets, the Women's National Basketball Association's New York Liberty, the National Hockey League's New York Rangers and the National Basketball Association's New York Knicks.
PREMIUMS IN BUNDLE
From its September launch until April, HBO, Showtime, Starz and IFC also provided programming as part of the iO bundle.
On April 1, Cablevision instituted a $4.95 fee for HBO, Showtime and IFC, while Starz was pulled from the VOD menu. Dolan said the initial Starz deal was a short-term agreement. "We're talking to them about putting it back," she said. Starz executives confirmed talks were ongoing, and said the company was also tied to discussions about carrying Starz Super Pak.
"We're working to find the right combination of free and transactional VOD," Dolan said. "We don't want to cannibalize the transaction VOD revenue."
IFC is one of the first "basic" networks to be offered in an SVOD package.
"A lot of brands have enough brand recognition to be sold as a transactional product," Dolan said. "For iO it's all about choice. There is a limit how much free you want to put on there."
She believes consumers can handle the options presented by many different SVOD packages if the brands are strong enough. "It's the same model, the best of this network for one price. With HBO On Demand, people get it."
As for movies, Cablevision has benefited from deals with all the major Hollywood studios except for Viacom Inc.'s Paramount Pictures, Dolan said.
Movies are available for 24 hours after they are ordered. Adult movies are priced at $8.95 per title and are available for six hours.
Dolan said Cablevision also has benefited from advancements in the Sony Corp. set-top box, which allows for a better VOD interface. The Sony box was designed from the start to handle VOD options, rather than having to be added to the set-top software design later. "We can combine HTML screens with our menuing," she said. "As soon as you launch iO, you're on our main menu. You can select on demand. Each category has description."
The interface also helps consumers understand what's free, what's part of an SVOD package and what's a per-title purchase.
"The interface reinforces in language with each HTML page whether it's transaction or whether it's included," Dolan said. "When to you get to the final screen, a confirmation screen pops up."
There are also "help" videos throughout the on-demand service to guide consumers through the ordering process.
Each major on-demand provider — such as HBO, Mag Rack and Showtime — has its own dedicated "channel," which serves as a portal into on-demand menu and content. "Navigation is more and more critical every day," Dolan said, especially as new content is added or refreshed.