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VOD Moguls Forecast Packaged Gloom

20 Mar, 2002 By: Earl Paige

Video rental stores are doomed if they can't find a way to participate in video-on-demand (VOD) but replicators could benefit if they concentrate not on packaged goods but large size storage media, said panelists at Convergence 2002.

"Once people (sign up with) start using Starz On Demand…our focus groups tell us they stop going to Blockbuster," said Greg DePrez, VP Starz Encore Group.

"Cable operators now realize that by having VOD it will push their digital penetration, which is a whole new way of thinking about VOD," said DIVA GM Bev Doughty.

"The real advantage to cable is its two-way interactivity," said Russ Krapf, CEO/president, Keen Personal Media. "VOD is one of the many interactive applications and cable is not going to have an advantage over satellite until it has VOD."

Early VOD experiments offering huge libraries of movies did not pan out. Customers picked the few movies they wanted to watch, then forgot about VOD, DePrez said.

Starz – taking a page from the Disney playbook -- learned to rotate lists, add new movies every week and makes them available for just a month.

"Viewers thought the titles would always be available so we went to short lists. That limited availability implied the urgency of clicking now and our usage rates have shot up," DePrez said.

DIVA blundered, too, "By calling our service a video store in your home," said Doughty, when in fact, a big appeal of VOD is "never having to return a movie."

But all the movies can't be stored at one point contended Krapf. "I don't think that too many people, believe that all the broadcast content will be available from the head end whenever you want it," he said, predicting much cable operator demand for local storage.

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