When Comcast Corp.'s Philadelphia operation disclosed its second group of free video-on-demand content providers, Cable News Network — the medium's first live, 24-hour news channel — was on the list.
Among its offerings: episodes of Best of Larry King Live
and Crossfire, reports from entertainment and lifestyle correspondent Jeanne Moos, plus "bonus cuts of news events, press conferences and interviews."
But don't look for breaking-news content on a quick turnaround, or for the story packages that Headline News might be running. Neither CNN, the cable industry nor the ratings industry — or encoding providers, for that matter — are ready with the sound economic or technical models that could make such an endeavor work.
Instead, CNN executives look at VOD as but one application on a single platform in a multiplatform, multi-application universe.
CNN creates 20 or so two- to three-minute video clips each day for on-demand viewing. Consumers obtain the clips via subscription to CNN NewsPass or Real Network Inc.'s RealOne SuperPass — two paid Internet subscription services — or via broadband Internet-service providers AOL Broadband or Road Runner, which feature the same NewsPass product.
"What we're learning on NewsPass is that it is a broadband VOD product," said Turner Network Sales senior vice president and general manager, interactive and enhanced TV Kevin Cohen.
Half the universe?
CNN television content is available via VOD in Comcast's Philadelphia system and in the dozens of markets where Time Warner Cable has launched free on-demand. Those systems combine to reach 2 million to 3 million set-tops.
On the other hand, Cohen figures the AOL Broadband (4.1 million), Road Runner (three million), Real Networks (600,000 broadband customers) and NewsPass (in the five digits for standalone subscribers) reach more than 8 million homes, or half the broadband Internet universe.
"And once you have set-tops that have [Data Over Cable Service Interface Specification] modem connectivity, you'd have the ability to hit a button on the remote and get content directly from CNN.com on your TV set," Cohen said.
That is an interesting reverse-VOD convergence idea. For CNN, much of the VOD groundwork has been laid on the Internet. The news network uses Real's Anystream encoding system, which allows it to process content in both Real and Microsoft Corp.'s Windows Media Player formats at various speeds — typically 300 Kilobits per second or less.
"It allows us to encode in multiple formats at multiple bit rates," Cohen said.
But encoding live television news content on a quick turnaround isn't that easy — or cheap.
"VOD systems were developed for movies," Cohen said. "They weren't designed for short-form content. The quality assurance from the encoding and transport side is complicated and costly."
Still, CNN will dip its toe in the water with King
and Crossfire, as well as other special features built around current news events.
"It takes up to three weeks from time of encoding to propagating content down to set-tops," Cohen said. "We're faced with the issue of, how do we program for something that's going take weeks to get to the end customer?"
CNN answers that question by offering background reports. For instance, the network may provide the history of a specific conflict attached to a timely world-news development, like the nuclear standoff with North Korea or the Palestinian-Israeli conflict.
The hope is that such background information will induce viewers to watch the daily news on CNN, because they've increased their understanding of that issue — thus boosting ratings, Cohen said.
"You get them to follow a story on a day-to-day basis," he said. "We do that on CNN.com now."
Cohen believed that today's VOD offering — for CNN at least — is a back-door entry into interactive television, where content will be used to complement the linear signal.
What about repackaging Headline News content for VOD?
"Until we have Nielsen [Media Research] ratings [for VOD programs], we have no incentive to send people over to this other space," Cohen said of the VOD frontier.
Push for ratings
The fact that some operators are pushing for FOD content has brought the issue of how to rate VOD programming to the forefront.
"There are plenty of discussions," Cohen said. But ratings aren't something the average cable MSO president has worried much about, he noted.
"As cable operators do more digital ad insertion, their ad sales will represent a bigger opportunity for them," Cohen said.
The process of rating VOD content will follow an evolutionary path, he suggested.
"This past year, it was all about trying to get VOD deployed in as many systems as possible," he said.
Encoding CNN content on the fly and putting it on a server immediately — a practice Comcast and NBC have begun in Philadelphia — holds little interest for Cohen until the ratings issue is fleshed out.
"If Nielsen is not measuring this, I don't know what the incentive is to put it out there," he said. "We are showing the most important news that's available at any given time [on the linear channel]. I'm not sure what's the advantage" of doing that on VOD without ratings.
Other work also has to be done to simplify life for content providers. Home Box Office and other programmers update their VOD content once per week, with material that isn't time sensitive. CNN could send out 10 to 15 video news packages each day, but that's a costly encoding-and-transport endeavor.
Currently, CNN uses California Video Corp.'s technology to send content to Time Warner Cable systems and TVN Entertainment Corp. to beam content to Comcast in Philadelphia.
"From a content provider's perspective, it's another layer of complexity of dealing with multiple transport providers early on," he said.
Obtaining reliable usage data is another area where work must be done.
Time Warner Cable has offered on-demand content from CNN for the longest span, since last year.
"We're working with them on that front," Cohen said. "We know that data systems were set to track pay services, and the next step is to get information for free services. They know it's important to us."
Among the entries on Cohen's information wish list: data covering how many unique set-tops are viewing content, how many viewers are repeat users, the day and daypart when consumers use VOD and usage rates for the fast-forward, pause and rewind features.
"That information is critical to us," Cohen said.
But Cohen predicts that content will eventually be different than under today's model.
"Instead of time-shifting, make it complementary and synced to broadcast," Cohen said, so background reports on Iraq are present on VOD systems as live news from Iraq airs on CNN.
In other words, the line between linear and nonlinear television would become blurred, he predicted.