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TK's MORNING BUZZ: If You Think This Was a Bad Year for Video Retail, Just Wait Till Next Year -- When VOD Accelerates

20 Oct, 2000 By: Thomas K. Arnold

If you think this year was bad, just wait until next year.

That's when we're going to start seeing significant inroads made by the pushers of video-on-demand, who are quietly laying the infrastructure for what many believe will be a full-fledged assault by year's end.

What makes video-on-demand so deadly is that it mimics the video rental experience, offering viewers the chance to not only pick movies but also stop them, pause them and even fast-forward and rewind them at their whim.

Pay-per-view has never really taken off because it's a poor tradeoff. Yes, watching a PPV movie doesn't require a trip to a video store, but you can't "manage" the film as you can a rented video.

The powers that be in the cable and satellite industry know this, which is why for years they've been trying to perfect a technology that gives complete control to the viewer.

The technology exists, but the application has been a bitch, due to the high cost and time factor involved in building the infrastructure.

Now, VOD proponents are saying their time is finally coming. This is not to mean that everyone will have access to VOD by the end of 2001. But it does mean the baby steps proponents have been taking over the last few years will accelerate into a commanding stride.

Indeed, one major studio that shall remain nameless even has an internal timetable for the day, about two years off, when widespread availability of VOD will cause video windows to be slammed shut.

Will VOD be driven by the hits? You betcha. No one's going to wade through 5,000 movies on their TV-screen menus.

And that's why it's so sad that the video rental industry has become so dependent on the hits.

Retailers' one hedge against VOD is gone, and as one industry analyst recently told me, "It's only a matter of time."

I know we've heard such shouts before. For many of us, it's like the boy who cried wolf. Each year we hear that VOD will kill the video store, and each year that doesn't happen.

But if you remember the fable, just because the boy cried wolf time and time again doesn't mean the wolf never came.


Comments? Contact TK directly at:TKArnold@aol.com

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