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What A Difference A Year Makes

9 Dec, 2003 By: Holly J. Wagner

Last year at the Western Show, the cable industry event for the West Coast, all the buzz was about Internet Protocol (IP) video-on-demand (VOD). Movielink had just been launched in stealth mode and Starz Encore announced an IP add-on subscription for the movie network's subscribers.

This year the cablers, like most in the packaged media industry, seemed to have moved on from the IP hype and, while the talk was still about VOD, it was less about content and more about competion.

The cablers see true VOD (as opposed to NVOD, SVOD and the rest of the alphabet soup) as an imperative. Not only because DVD is a breakout hit with consumers, but because the threat of Rupert Murdoch getting his hands on DirecTV looms even larger now than it did last year.

True VOD is a challenge for cable or satellite. Satellite, which must beam the same program to a lot of receivers at once, has gone whole-hog for TiVo and similar digital video recorders (DVRs). Over this year DirecTV and Dish Network have both rolled out DVR options and priced them very aggressively for the holidays. Cablers, who traditionally have been limited to 33 starts at the same time because of the headend equipment they need to feed programming, have rolled out a variety of options that let consumers get more movies and shows in more convenient ways.

At the show this year I have to admit I was surprised, not to see that the standing-room-only crowd at a panel discussion called “VOD: Who's Watching What?” but that every time the presenters put a chart or graph up on the screen, a dozen or so people whipped out digital cameras and took grab shots of whatever little tidbits of research they could get. I've been to a lot of trade shows, but I've never seen a feeding frenzy quite like that before. Well…. Maybe at AVN.

The one constant is consumers. Consumers still want the same things they've always wanted: commercial-free viewing when and where they want it. So far that has worked in DVDs favor.

The cablers know VOD is an imperative to stay competitive with satellite and DVRs, not to mention DVD. They know it reduces subscriber churn and makes for happier customers. They know it's the only way they can deliver a DVD-like experience and make no mistake, they aren't waiting around to do it.

The Western Show won't be around next year for a look back at how the cable companies have done in delivering on the promise of VOD, but I suspect the packaged media cash registers will tell the story. Let's hope it has a happy ending.

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