Maybe all those Wall Street analysts can start putting VOD revenue into next year's MSO financial models after all.
Cox Communications Inc. last week announced it launched video-on-demand in San Diego using Scientific-Atlanta Inc.'s "Explorer 2000" set-top boxes and hardware and software from Concurrent Computer Corp.
Cox joins Time Warner Cable and Comcast Corp. in launching VOD this year.
Cox's San Diego system serves 520,000 subscribers. Because it launched digital in January 1999, Cox probably has about 50,000 to 60,000 VOD-capable digital boxes in the market.
But VOD will initially launch to less than 10 percent of the market, said Lynne Elander, vice president of video-product management at Cox.
"We hope to have it rolled out more broadly early next year," she said, after the MSO completes some technical hurdles.
Cox is pricing hit movies at $3.95 and classic library titles from $1.95 to $2.95. Pay-per-view supplier In Demand is serving as intermediary for Hollywood-studio movie product.
Cox would offer the typical 20 hit movies released to PPV each month, Elander said, plus several hundred library titles. Eventually, those would include everything fromTop Gunto classics likeTreasure of the Sierra Madre. Discovery Channel, Bravo, Comedy Central and other cable networks will also contribute product.
Premium networks may also find VOD helpful, she said. "The networks can provide the 'best of' for sampling."
Cox won't have all the hit movies, because In Demand hasn't reached VOD-licensing deals with all of the major studios. Paramount Pictures and Columbia TriStar have been reluctant to license movies for full VOD deployments.
"Certainly we understand the content owners have concerns about their existing distribution channels," Elander said. But Cox believes VOD will help the studios generate more revenue for their product.
"We think the pie grows bigger," she said. "The studios need to see we are committed to the business."
The S-A boxes allow subscribers to pause, fast-forward and rewind movies. And Cox will give consumers a 24-hour period in which to watch a movie once it's ordered.
Cox chose the name "Movies on Demand" based on consumer research. Consumers place high value in the phrase "on demand," Elander said. As for movies on demand rather than video-on-demand, Elander said, "when pressed, that's what customers call it."
For Concurrent, it was the first of two deployment announcements last week. The company says Beijing Fengtai Cable would install its MediaHawk VOD server technology in a 350,000-subscriber cable system. BFC will provide VOD via IP streaming using a gigabit Ethernet network.
Concurrent deployments include Time Warner Cable in Tampa and Honolulu; Horizon.com in Singapore and an undisclosed Comcast Corp. location. Cox also is installing VOD in Phoenix with Concurrent and plans further rollouts in 2001.