Starz Encore Chief Burnishes SVOD Model30 Sep, 2002 By: Kurt Indvik
The ultimate success of video-on-demand rests in the industry delivering a subscription-based model and offering hit movies on-demand, said John J. Sie., Starz Encore Group founder, chairman and CEO, during a keynote address today at the Forrester TV Summit in New York.
Sie said high-demand content (e.g. hit movies from Hollywood) would drive the uptake of VOD and that “the experiences of the cable and satellite industries, and many other proven ‘on-demand business models' such as AOL, have shown that monthly subscription business models are far superior to their transactional counterparts.” Sie added that in the next five years there will be an estimated 52 million multichannel video households from both cable and direct broadcast satellite (DBS) that have on-demand capability, and will be competing for VOD content with approximately 50 million broadband households with cable modems and DSL.
Sie said the goal is to directly target and win business from the home video rental business. He said surveys of Starz On Demand users showed that as a result of having the service they would rent fewer videos. “With great titles such as Rush Hour 2 and Pearl Harbor, Starz On Demand provides cable, DBS and broadband providers the killer app to repatriate the $8 billion-plus per year that consumers still spend renting videos … and give them the power to select movies and other programming on demand with DVD-like control with no per-transaction fees and no trips to the video store.”