After months of banter about the promise of subscription video-on-demand,
Time Warner Cable's Columbia, S.C., system will be the first to launch Home Box
Office's SVOD service this summer, according to sources close to the
The 130,000-subscriber system will be the first in the United States to offer
commercial SVOD services from any premium programmer, according to sources. HBO,
Showtime Networks Inc. and Starz Encore Group LLC have all discussed the launch
of an SVOD service sometime this year.
Representatives from HBO would only confirm that the programmer is planning
to launch SVOD sometime this year.
Time Warner Cable vice president of corporate communications Michael Luftman
also would not confirm the South Carolina launch. He said a commercial SVOD
deployment will take place 'in the not-too-distant future,' before adding, 'We
will also expand into another system over the summer.'
What's unclear is how much HBO will charge for SVOD, which allows subscribers
to order such original fare as Sex and the City and The Sopranos
-- as well as hit movies within the premium window -- on-demand and with VCR
functionality, including pause, fast-forward and rewind capabilities.
Pay TV executives have said prices could range anywhere from $3 to $10 per
month in addition to traditional monthly premium rates.
AOL Time Warner Inc. chief executive Gerald Levin, speaking at the Deutsche
Banc Alex. Brown Media Conference in New York, said the company will test three
different price levels to determine how much subscribers will pay for the
service, although he would not provide specific details.
'Consumers will pay X dollars for that privilege to get HBO subscription
video-on-demand. If I'm right about that, that's a very significant thing,'
Adelphia Communications Corp. announced last month that it would offer SVOD
services as part of its VOD services in Cleveland and western Pennsylvania. But
rather than charging a fee for the service, Adelphia executives said the MSO
would fold SVOD into existing premium packages as an added-value component
intended to reduce churn.