Mag Rack Says It's Learning

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Mag Rack, the video-on-demand service defined by its original, niche content,
has grown up a lot in its first year.

Born out of the Rainbow Media Group programming family of networks, Mag Rack
has more than tripled its content since its Sept. 28, 2001, launch, tinkering
with a programming model that niche programming can be mass appeal.

It's provided cable operators with unique programming that isn't available on
direct-broadcast satellite.

But most important, it appears to have taught cable operators and subscribers
the value and notion of free on-demand content.

When VOD emerged a year ago, movies and premium services dominated the
discussions. 'We saw a very different opportunity,' said Matt Strauss, executive
vice president and general manager of Mag Rack, 'to fill in the holes in an
operator's programming lineup with a service that was designed exclusively for
the VOD platform.'

A side benefit was the notion that Mag Rack could be used 'educate people and
upsell them to other revenue opportunities,' Strauss said.

That notion has grown more important in the past year. When Mag Rack
launched, cable operators weren't talking about free on-demand content to drive
VOD usage. But 'FOD' has become central to cable's plan for subscribers to see
the value of VOD and drive digital penetration higher.

Mag Rack launched on sister company Cablevision Systems Corp. last year, but
it didn't gain legitimacy until Charter Communications Inc. and Insight
Communications Co. Inc. came aboard in the past few months.

Strauss said early numbers from Cablevision on usage are promising. Some 48
percent of Cablevision's iO: Interactive Optimum subscribers watched some Mag
Rack content in February. By August, the number shot to 87 percent, Strauss
said.

Mag Rack launched with 10 content areas, but that number has risen to 33.

Earlier this year, when Mag Rack had 22 titles, the company surveyed
subscribers and found that 70 percent said Mag Rack addressed areas of interest
to them. Some 60 percent said Mag Rack added value to their digital
subscriptions.

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