Will Studios Buy In Demand Plan?


New In Demand president Steve Brenner envisions the pay-per-view network as the engine that will propel the cable industry's dominance of the video-on-demand business. The hard part will be convincing the studios to buy into his vision.

Thus far, the network-along with the other alternative distribution technologies-hasn't had much luck in securing true and long-term VOD rights to top studio films.

Mandated by the industry as the liaison between VOD studio content and operators' advanced broadband-digital infrastructure, In Demand has a lot of pressure to deliver those rights so cable can capitalize on what most industry observers believe is the future of the PPV-movie genre.

Brenner is optimistic his PPV network can come to terms with the studios because that's what's in the best financial interests of both sides.

The cable industry-led by In Demand owners Time Warner Inc., Cox Communications Inc. and Comcast Corp.-is moving quickly toward developing the "killer app" VOD platform that would undoubtedly drive digital boxes into the home and system revenues skyward.

The delivery pipe to the home is there, but you need marquee programming content to make the technology attractive to consumers. And Hollywood has proven that it has what consumers want to see and are willing to pay for.

Brenner believes the combination of VOD with the variety of programming and interactive services digital cable currently provides will ultimately win over consumers and thwart efforts by competitors such as DirecTV Inc., Blockbuster Inc. and Intertainer Inc. to offer competitive services through alternative distribution methods.

"Many of our competitors still have a long way to go to implement their services," Brenner said. "We have to take advantage of the platform that we have available to us today by providing a seamless, easy-to-use service for consumers that offers the most appealing programming at the convenience of the consumer."

But the studios aren't convinced yet. In Demand is just one of many broadband-based companies that desperately want VOD access to hit box-office titles.

Hollywood is in the proverbial catbird seat, waiting to see which company using what broadband technology-be it cable, the Internet or DSL-will generate the most revenue for its business.

"There are a lot of things we have to consider before making any deals with In Demand," one studio executive said. "What about the Internet? What about the phone lines? Everyone can offer video into the home, so we have to find the best way to maximize performance for our product."

While studio executives admit that In Demand vastly improved its marketing and promotion of PPV movies and increased revenues through the launch of enhanced-PPV channels for digital, it remains to be seen whether In Demand can sell its vision of cable's VOD future to the studios.