S-A Explorers VOD Options Grow

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Scientific-Atlanta Inc. plans to add two more
video-on-demand solutions to its "Explorer 2000" digital set-top box, expanding
its VOD options as more service launches creep closer.

S-A said it would work to integrate the "On Demand
TV" solution from Diva Systems Corp., as well as SkyConnect Inc.'s end-to-end
solution, which uses its own video-server application platform and video servers from
nCUBE, which is acquiring SkyConnect.

Diva and SkyConnect will work with S-A through its
"CreativEdge" program, which provides technical support and operability
certification from S-A to third-party applications developers for its
interactive-digital-network platform.

Already ported to the Explorer 2000 are VOD solutions from
SeaChange International Inc., Concurrent Computer Corp. and Intertainer Inc.

SkyConnect is also already ported to the Explorer 2000, but
it is working to become more integrated with S-A's digital-network architecture, according
to SkyConnect executive vice president Dan Sheeran.

The company is basically shaping an encryption scheme
enabling SkyConnect's digital stream to be managed as part of the overall S-A
digital-network environment, allowing an operator's conditional-access controller to
control the SkyConnect stream as one of several offered to subscribers.

"Each of these companies will offer different features
and benefits to different MSOs," CreativEdge business-development manager Kevin
O'Brien said. "We want to provide choices so our customers can have a wide variety of
VOD solutions."

So far, VOD rollouts have been relatively limited as MSOs
concentrate instead on completing digital system upgrades, launching digital programming
and offering enhanced services such as high-speed cable-modem Internet access.

Diva is currently running on six cable systems owned by
Cablevision Systems Corp., Lenfest Communications Inc., Rifkin & Associates Inc. and
Adelphia Communications Corp.

Diva president David Zucker said the deployment pace could
accelerate soon because operators have had time to get a better handle on their digital
rollouts and on the complicated deployment issues associated with VOD.

"It's not just a server and spinning out streams --
it's a whole system solution, subscriber management and the software that goes with
it," Zucker said. "The question is: When do they put their foot on the pedal? We
think that's going to be sooner, rather than later."

Two MSOs that are putting their feet in the door soon with
Diva's solution are Chambers Communications Corp. and Insight Communications Co.

Chambers plans to launch VOD in its Novato, Calif., system
in June, using Diva's "OnSet" platform via General Instrument Corp.'s
"DCT-2000" digital set-top box. Insight should follow shortly with a launch on
its Rockford, Ill., system, also using the DCT-2000.

Michael Willner, president of New York-based Insight, said
the combination of VOD with interactive functionality -- such as the ability to pause,
rewind or fast-forward programming -- had generated consumer feedback indicating a
compelling business case.

VOD will be launched on Insight systems in conjunction with
other interactive applications, such as Source Media Inc.'s "LocalSource"
community-oriented content suite, which includes local weather, sports, movie and event
listings.

Willner said Insight expected buy-rates for VOD to be about
three times more per customer, per month than those for near-VOD.

"What focus groups really told us was that even people
who have downgraded to our basic service or disconnected to take satellite service instead
look at both that functionality, as well as LocalSource, as possible reasons why they'd
come back to cable," Willner said. "That was a very interesting education for
us."

Willner said the industry's limited VOD rollouts so far
have partly been a function of the economic juggling between MSOs and
interactive-solutions providers to reach mutually acceptable business models for their
specific markets.

"The deals have to be right for everybody,"
Willner said. "It just took some time to get deals worked out, not just with Diva,
but with all of them."

S-A last week also announced that it had begun shipping its
"ASI" QAM (quadrature amplitude modulation) modulator for encoding requested
movies into the video stream that is sent to individual subscribers.

The modulator uses the Digital Video Broadcast standard
interface, which S-A said will enable operators to plug it into any VOD server with the
standard ASI output.

Besides DVB ASI, the modulator can also receive MPEG-2 data
packets via either S-A's single-wire interface format or GI's "DigiCable"
headend-expansion interface.

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