VOD Providers Vie for Cable-Operator Deals


The list of companies offering video-on-demand solutions to
cable operators keeps growing, as Unisys Corp. became the latest to enter the VOD arena.

Besides Diva Systems Corp., which counts seven affiliated
cable systems (see related story), the roster includes SeaChange International Inc.,
Concurrent Computer Corp., Intertainer Inc., TVN Entertainment Corp., Vivid Technology and

Unisys, with 33,000 employees in 100 countries, is sure to
ruffle rivals' feathers by positioning itself as the deep-pocketed, big-name new kid on
the VOD block.

Sizing up the competition, Unisys spokeswoman Kary Galloway
said, "There are a lot of smaller companies in the marketplace, but their viability
is a little bit questionable as far as whether they'll be able to continue and turn a
profit. Also, we haven't seen yet from some of these companies how scaleable their systems
are going to be."

She continued, "We have the financial backing and the
resources, and we're situated to deliver a working product" in the fourth quarter of

"Unisys servers are running the whole NASDAQ stock
market, and they have never crashed," she added. "They lend themselves very
easily to VOD technology. Even our smallest server can handle 7,000 concurrent video
streams. We have the capacity to go to hundreds of thousands."

SeaChange said its VOD server is scaleable to support
headend or cable-hub installation. The six-year-old, publicly held firm has inked a memo
of understanding with Time Warner Cable to provide servers and software for the MSO's
digital boxes.

Time Warner also has an MOU with Concurrent, and it expects
to shift into the VOD phase of its digital rollout in late 1999 or early 2000.

A VOD trailblazer via the December 1994 through September
1997 Full Service Network project in Orlando, Fla., Time Warner has partnered with
SeaChange since early 1998 to provide movies-on-demand in hotels served by its New York

Time Warner and Canada's Rogers Cablesystems Ltd. are
testing the SeaChange system in preparation for residential VOD deployments. "We have
six different commitments to do different deployments this year," SeaChange director
of interactive technologies Yvette Gordon said.

Also a force in digital ad insertion and near-VOD,
SeaChange provides MPEG-2 digital-video systems serving more than 20,000 TV channels to
cable operators and broadcasters worldwide.

Staking its claim as a VOD player, Concurrent said in May
that it's spending about $1 million per month on VOD research, development, sales and

In releasing financial results for the quarter ended March
31, Concurrent added that it is working with "several cable companies that are
planning VOD trials to start … no later than the summertime," and it expects to
generate "significant revenue from the residential cable market."

At the Western Show last December, Intertainer selected
Concurrent's "MediaHawk" video server to deploy entertainment-on-demand
applications to cable customers receiving the Intertainer service on their television

Intertainer delivers on-demand programming to either TVs or
personal computers using high-speed-data lines over cable or telephone connections.

Its strategic partners include Comcast Corp., U S West,
Sony Corp., Intel Corp. and NBC. The three-year-old company is conducting VOD trials with
U S West in the Denver market and with Comcast in the Philadelphia area.

In March, NVOD provider TVN signed the first affiliation
agreement for its turnkey VOD programming and transactional service.

Strategic Technologies' 2,500-subscriber Valencia, Calif.,
cable system will initially use one analog channel to provide VOD, and it will eventually
go to three channels as product offerings are expanded beyond current movie releases.

Customers are expected to start ordering VOD in June. TVN
president Jim Ramo called the Valencia project "the first of a handful we're going to
do in the next three to six months in order to test the whole system and marketing

The video server in Valencia, from Vivid, uses industrial
PC-server hardware and Microsoft Corp.'s Windows NT operating system. Chalfont, Pa.-based
Vivid described its VOD solution as "a fully integrated system including video
streaming, interactive-application support, VOD set-top management and purchase tracking
with billing-system interface."

"We have technical trials going on with three
MSOs," Vivid CEO Fred Allegrezza said -- one of which is understood to be MediaOne
Group Inc., which is being acquired by AT&T Corp.

Rounding out the list of VOD providers is the team of nCUBE
and SkyConnect. The companies expect to conclude a final agreement for nCUBE's proposed
purchase of SkyConnect later this month.

In announcing the deal in March, 16-year-old nCUBE asserted
that the combined entity would be No. 1 worldwide in VOD, No. 1 in NVOD and No. 2 in
digital ad insertion, boasting an installed base of video-server systems encompassing more
than 21,000 broadcast-quality MPEG (Motion Picture Expert Group) channels.

Most of the players have integrated, or are in the process
of integrating, their VOD services with the digital platforms of leading cable set-top-box
makers General Instrument Corp. and Scientific-Atlanta Inc.