TWO ROUTES TO VOD REVENUES
July 26, 1999
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Electronic Media via NewsEdge Corporation : Video-on-demand companies have used two business models to get a piece of the cable market: by limiting their involvement to just hardware or by going the soup-to-nuts route, offering full video-on-demand service.
Companies that take the first approach -- nCube, Sea Change International and Concurrent Computer Corp. -- let their cable customers handle content and marketing.
Those that take the full-service route -- Diva, Intertainer and TVN Entertainment Co. -- handle nearly every aspect of service, from technology at the headend server to network control, administration management software, content acquisition and marketing.
Of that group, Diva has been the most prominent force in this business over the past two years, said industry analyst Stewart Schley of Paul Kagan Associates.
Diva's full-service package includes patented hardware, a suite of software that enables video on demand and manages the business and support services ranging from content encoding, licensing and distribution as well as asset management, navigation and marketing.
All seven deployments to date bought some variation of the package at a negotiated split of variable revenues. But that's about to change.
''I don't anticipate us doing much more variable revenue splitting going forth,'' said company President David Zucker. ''It will be a more flexible business model, customized to meet the needs and skills of the MSO -- more of an a la carte pricing.'' #
<<Electronic Media -- 07-19-99, p. 18>>
[Copyright 1999, Crain Communications]
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