Whats Next? Premium On-Demand


The future of the premium-network market could likely be
quite different after video-on-demand is added to the mix.

Both Home Box Office and Showtime Networks Inc. agreed that
they are, at most, 24 months away from the point of rolling out limited tests of a system
that will enable digitized subscribers to pull up certain programming at will.

Jeffrey Wade, executive vice president of sales and
affiliate marketing for SNI, said he has been looking ahead to a day in the near future
when a "Showtime-on-Demand" will exist, and he went on to describe it.

"Let's say you subscribe to Showtime on a monthly
basis, you get your 17 screens of regular linear TV and you also get your
Showtime-on-Demand," Wade said. "It will be like receiving your Time
magazine or National Geographic: By the time it's out of date, it doesn't serve you
any longer. Same with this on-demand service."

Under Showtime's model (which will be somewhat similar to
what HBO concocts), subscribers will be able order any program scheduled to appear on any
of the company's 17 channels that month at the same cost of the regular monthly
subscription price.

At least initially, then, a prospective video demander will
not have access to, say, the entire Showtime programming library, but merely to what's
available on the server during a given day, week, or month, Wade figured.

"But I'm just telling you what I'd like to see,"
Wade admitted. "I have no way of knowing anything yet. I have no magic wand to wave.
And I have absolutely no idea what it would cost us, but it would not be inexpensive
initially. All that we would be looking to do out of the gate is to recover our costs, I'm

John Billock, president of HBO's U.S. Network Group, agreed
that it's more a matter of making the expense of such a system work, rather than
technological advancement, that's keeping VOD out of the marketplace right now.

"It's fast becoming feasible," he said, "and
I think that the cost curve is tumbling fast. I think that it will be economically
deployable much sooner than people think."

--Ray Richmond