MSOs: Diva Sale Won't Dim VOD

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Cable operators that use Diva Systems Corp.'s technology to power video-on-demand weren't exactly caught unaware when the company filed for Chapter 11 bankruptcy and announced plans to sell most of its assets to Gemstar-TV Guide International — and they aren't expecting the development to damage their rollouts.

Insight Communications Co., Charter Communications Inc., AT&T Broadband and other MSOs have recently forged backup deals to support their VOD rollouts. In the short-term, they plan to maintain their Diva systems even after the company becomes part of Gemstar.

Insight had plenty of notice as to the direction in which Diva was headed, CEO Michael Willner said.

While Gemstar has indicated it has no intention of getting into the VOD business once it acquires Diva's technology and assets, Willner said arrangements have been made to have it service Insight's Diva software systems.

Insight had already purchased its VOD servers from Diva, so they will be staying put, Willner noted.

"We will develop a more ubiquitous platform, I guess, that we can use with anybody else's servers as well as time goes by," he said. "But there is no rush for us to have to make any changes in the equipment."

For its future rollouts, Insight will obviously seek other VOD providers, Willner said.

TVN STEPS IN

On the content side, Insight has already forged a delivery deal with TVN Entertainment Corp. It will acquire the programming itself, either through TVN or directly from studios.

That will alter the existing VOD library, but "it won't be a negative impact," Willner said. "I think as more and more studios are coming back into the VOD business we're going to see an expansion of the content over the next few months."

A Charter spokesman said the MSO bought and installed different VOD technology several months ago, in case it needed to make a quick switchover. But it plans to continue to use the Diva hardware and software in the short-term.

In April, Charter announced a server deal with Concurrent Computer Corp. to provide VOD servers in an undisclosed number of markets. For content, the MSO also said it has been negotiating directly with providers including Hollywood studios, as well as third-party content aggregators.

Meanwhile, AT&T Broadband will work with Diva to continue supporting its VOD rollout in Atlanta and Los Angeles, according to spokesman Tracy Baumgartner.

Last month AT&T Broadband forged a content deal with In Demand LLC, that fare should be available in the coming months.

Future VOD rollouts or expansions will be another matter, though.

"We have evaluated the other VOD providers and are able to move quickly with transition plans for Atlanta and L.A., if that is necessary, and with additional market launches, if we choose to do so," Baumgartner said.

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