Time Warner Cable launched video-on-demand service in its New York City system last week, placing a heavy emphasis on transactional content: hit movies from Hollywood and subscription VOD from Home Box Office and Showtime Networks Inc.
"We've been testing for a number of months," said Time Warner Cable New York division president Barry Rosenblum. The operator selected last week's launch date "when we felt system was stable and perfect. Over the next two weeks, we'll be notifying people as service is turned on in their area."
TWC had already offered VOD in most of its other markets, but the New York system has typically been late in the new-service launch cycle. The Gotham platform is always important, though, because it gives big financial and media players a first-hand look at highly touted new technology and services.
Programmers vie for a slot on the TWC system to gain legitimacy in the eyes of Madison Avenue.
Given the prices of cable stocks — and the hammering the industry's taken over capital expenditures — a Manhattan VOD project gives cable a chance to prove to Wall Street that industry capex budgets are well-spent.
Half of Time Warner's 500,000 New York-area digital subscribers will be VOD-enabled over the next two weeks, with the balance online by year's end, said Rosenblum. Subscribers are being activated on a hub-by-hub basis within the system's 20 hubs.
In Demand LLC is supplying Time Warner with hit movies and library product. The service will offer between 80 to 100 movies, updated weekly. Hit movies are priced at $3.95 a piece; library titles at $1.95.
In addition to full VCR functionality, consumers have access to a film for 24 hours after ordering it. All movies are in the same window as PPV, In Demand said.
TWC will be able to offer cable's most complete lineup of Hollywood studios for VOD: Sony Pictures, Universal Pictures, Metro-Goldwyn-Mayer Inc., Twentieth Century-Fox Film Corp., Warner Bros. and The Walt Disney Co. The only missing studio is Paramount Pictures Corp.
In Demand delivers Disney movies to TWC based on an arrangement specific to the MSO. At the moment, no other cable operator has VOD rights to films from Disney-owned studios.
"You never want to go out there with half the product," said Rosenblum, who added that it was important for cable to be competitive with video stores, in terms of choice. "You have to have the product to make the technology viable."
About 70 percent of the movies will be hit titles, he said, and 30 percent will be library offerings. October titles include Walt Disney Pictures's The Rookie
and New Line Cinema's Blade 2
. Time Warner also will launch adult product in the next few weeks.
SVOD at $6.95
TWC offers SVOD packages from HBO, Cinemax, Showtime and The Movie Channel for $6.95 a month. A premium subscriber to any of those networks can get the SVOD package — typically 100 to 150 hours per major network — for that price.
The package includes a smattering of free on-demand content, including fare from Home & Garden Television, Food Network, A&E Network and Cartoon Network, which will be added in the next few weeks.
Other operators have emphasized FOD as an important piece of VOD in terms of reducing digital churn, but it will play a minor role in New York — at least initially.
That's partly because it's taking time to put together FOD deals with programmers.
More content coming
"FOD does a couple of things," Rosenblum said. "Anytime you put more value in the product, it does help reduce churn," he said, although churn doesn't plague the Time Warner system. "It also helps people who may be afraid of the technology."
Other "free" content, such as new stories from Time Warner's New York 1 News, could be added in the future. At present, subscribers to TWC's Road Runner high-speed data service can click on 10 streaming versions of stories from local-news outlet, and that idea could be transported to the VOD platform, he said.
VOD content is delivered by an nCUBE Corp. server.
Time Warner uses Scientific-Atlanta Inc., Pace Micro Technology and Pioneer Electronics Corp. set-tops in its New York system, which covers Manhattan; Staten Island; portions of Brooklyn and Queens; Mount Vernon, N.Y.; and portions of Bergen and Hudson counties, N.J.
The system had been upgraded to 860-megahertz capacity, Rosenblum said, so no other tweaks to the plant were necessary to launch VOD.
Pioneer's Passport IPG will provide subscribers with a roadmap to the IPG menu. The movies-on-demand portal will appear on channel 1000, with films sorted by title and genre.
HBO's SVOD portal will appear on channel 200; Cinemax on channel 210; Showtime on channel 220; and TMC on channel 230.
Multiplexes of each individual premium network are adjacent to their respective SVOD portal. For instance, HBO's multiplexed channels run from 201 through 209.
The free on-demand content will likely follow a similar pattern, Rosenblum said, with basic services assigned their own VOD-portal channel.