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Will VOD Have a Breakthrough?

10 Jan, 2006 By: Stephanie Prange

This will be the year there will be “breakthrough” in video-on-demand, said Curt Marvis, CEO of Web video-on-demand service CinemaNow.

He admitted he has said the same thing annually for many years, but stuck to his guns that VOD “will actually begin to emerge” as a force this year.

Marvis and other VOD proponents spoke at a panel during the Consumer Electronics Show in Las Vegas this month.

“The good news is [after struggle], we are starting to see this area gel,” added fellow panelist Alan Citron, SVP of marketing at competing VOD concern Movielink, backed by several major studios.

“It's a pretty exciting time in the industry,” agreed Scott Roesch, VP and GM of online short-film VOD company AtomFilms.

Many panelists credited Apple and its video iPod with helping to move the VOD needle.

“Apple showed you can reverse that trend [of illegal downloading on the Web],” said Josh Goldman, CEO of VOD service Akimbo Systems.

“[Apple video downloads] lit a fire under the studios,” Marvis said, adding it was an “important catalyst” to move VOD forward.

Still, Marvis said there are roadblocks to VOD adoption that could take a many years to overcome.

The industry doesn't talk enough about “making it easy,” Citron added.

One roadblock is the windows system, which gives VOD players movies late in the game.

“There's a tremendous amount of inertia [behind the current window system],” Marvis said. “The situation is going to take a while to change.”

“[The studios] are very smart about how they monetize their product,” Citron said.

Participants on another panel were also optimistic, but cautious, about the future of the digital video recorder, set-top and PC server entertainment market.

Mitch Weinraub, of Comcast Media Center, said Apple had “cracked the dam” on VOD delivery.

“We really believe everything in the future will be on-demand,” said moderator Rob Glidden, of Sun Microsystems.

“The consumer is demanding the ability to use digital content whenever and wherever they want it,” added Rob Pait, of data storage company Seagate Technology.

Panelists predicted windows would close and Wal-Mart, Blockbuster Inc. and Best Buy would be the losers when the on-demand future arrived.

Weinraub said Netflix had the advantage of a good brand, but would have to deliver movies online.

Still, some cautioned that digital rights management issues slowed progress in digital delivery. They also noted consumers may not be ready to store their entire entertainment collection digitally in the home.

“If you need an IT degree [to run your entertainment], it won't work,” said Dave Davies, of DVR supplier Scientific Atlantic.

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