Fox, Disney, Comcast Make VOD News

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Anaheim, Calif.— Two video-on-demand panel sessions at last week's Western Show played to standing-room-only crowds, and attendees were rewarded with indications of just how VOD is evolving in cable.

Fox Cable Networks Group executives disclosed that the company has renewed its VOD deal with Cablevision Systems Corp. for the programs 24
and The Shield, with the caveat that those shows will be now available on a transactional basis.

ABC Cable Networks Group revealed that it is testing several subscription VOD packages with an unnamed MSO.

And Comcast Corp. announced that its Philadelphia VOD launch garnered a 20 percent usage rate among digital subscribers, averaging eight sessions per user.

"The results are very, very encouraging," Comcast vice president of marketing and new products Andy Addis said during a panel session last Wednesday.

He said Comcast will spend $2 million beginning in January to promote its VOD service in Philadelphia. The service offers a mix of hit movies, free-on-demand content from basic programmers and Showtime On Demand.

Addis added that both Showtime and The Movie Channel on Demand will be part of its package by January. The on-demand portions of those services will be available to existing Showtime and Movie Channel subscribers at no additional charge.

The debate over paying for content raged at the Western Show.

Fox Cable executive vice president of affiliate sales and marketing Lindsay Gardner said Fox and Cablevision "will test subscriber's willingness to pay" with Fox's hit 24
and FX's The Shield.

Per-episodes prices could be 99 cents, but Cablevision will make the final call on the per-play and season-pass component.

Gardner also said Fox will supply National Geographic Channel and Speed Channel programming for free to Comcast in Philadelphia, indicating that different basic content can have different values on VOD.

ABC Cable senior vice president of affiliate sales and marketing Ben Pyne said the company is testing SVOD packages from Toon Disney, Disney Channel and Playhouse Disney in several markets. "We're trying to use the library in a creative way and create packages that are refreshed on a monthly basis."

Sources indicated that Time Warner Cable was the test MSO, but Pyne would not comment.

Pyne said he has heard from operators that "less is more" when it comes to amount of basic-cable fare that should be on VOD.

Disney is programming specific SVOD packages, loading up with holiday specials for December, for example. But it is clear the industry is still experimenting with what content should be free and what belongs in paid packages.

"Before we go to the SVOD place," Comcast's Addis said, operators should work with programmers to extract value even for free-on-demand content, perhaps with sponsorships or long-form advertising.

"We are not good at selling a bunch of different tiers," he said. On-demand functionality without a price increase for premium networks can help address churn issues and bolster the category, Addis added.

Likewise, free-on-demand content can help extend digital penetration, he said.

Lynne Elander, Cox Communication Inc. vice president of video product development, said free-on-demand has to help generate revenue streams, whether that's driving eyeballs to linear networks to improve ratings or viewers to SVOD services. "The economy is all about eyeballs," she said.

Executives at premium programmers spent much time during one general session Wednesday voicing worries about clunky interfaces and fretting about the potential harm that might be done to their brands if on-demand versions of their services aren't consumer friendly.

Starz Encore Group LLC chairman and CEO John Sie said that according to surveys his company has conducted in VOD markets, consumers most often complain about glitches and having to make too many "clicks" before getting to their movies.

Rainbow Media Holdings Inc. CEO Josh Sapan spoke about "digital-disoriented" customers who can't find the programming they want without a smooth interactive guide. He also said cable could lose "digital-demanding" subscribers to direct-broadcast satellite services with digital video recording capabilities unless cable's on-demand content is compelling and the interface is effective.

Home Box Office chairman and CEO Chris Albrecht and Showtime Television chairman and CEO Matt Blank expressed similar concerns.

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