The Year of VOD ... Again?
Mike - this is from Communications Technology magazine's Pipline newsletter. Addresses the difference between SVOD (Subscription Video On Demand and traditional VOD or what is now being called POVOD (Plain Old Video On Demand). Also, since we are discussing the dearth of content available for VOD, the article addresses that in a couple places, including the following news that shows up way at the end of the article:
"A major studio, Vivendi Universal, and cable's largest PPV provider, iN Demand, cut a multi-year agreement that covers all of Universal's output during the life of the deal plus some library and TV product. The agreement, which goes into affect Aug. 1, bodes well for VOD at AOLTW, AT&T Broadband, Comcast and Cox since iN Demand is their joint venture."
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If you're skeptical that 2001 is truly "the year of VOD," that's probably because pundits have made that claim for the last several years. However, technical trials and recent good words from the irksome content side make "real VOD" look more real every day. And perhaps most importantly, research is showing that subs absolutely love this stuff.
SVOD Hotcakes -- Earlier this month, Time Warner Cable kicked off a test to measure consumer interest in subscription VOD (SVOD) by offering HBO On Demand in Columbia, SC. For a set fee, subs can access HBO's series and movies any time they want with rewind, fast forward and pause features. The response was so extraordinary that it actually took the SVOD test down. So, if you're thinking about a similar trial, here's your chance to learn from Columbia's experiences.
"We were really very, very pleasantly surprised by the response," TWC's Vice President of Corporate Development Mike LaJoie tells CT's Pipeline. But while TWC got its answer on consumer interest, so many people tried to access the system at one time that the digital network controller couldn't set up sessions fast enough.
"It wasn't a capacity issue, but a concurrent demand issue," LaJoie explains. "There aren't any bandwidth capacity issues at all. The ability to add more bandwidth to a particular application is one of the core architectural tenants of HFC and the Pegasus product. It was just unexpected demand and the fact that we need to upgrade the software. I think on the order of two or three months, we'll be back to offering this full-force."
The Columbia system has considerably pared down the number of subs that can access SVOD while it changes some of the session setup software and upgrades to a more powerful version. LaJoie declined to say how many subs were in trial from the beginning and how many are in it now.
While waiting for the software upgrade, which LaJoie expects to happen in a few months, Columbia is slowly taking on SVOD subs. After several hundred are added, the trial's staff watches the system for a day or two, and then plugs in several hundred more.
"[SVOD] is very different from movies-on-demand in how people use it," LaJoie says. "VOD is kind of self-regulating because they make a purchase decision every time they use it. They're a little more cautious and deliberate about accessing the system."
SVOD customers have no additional dollar decision to make since they've already paid a monthly fee. "With movies-on-demand, they don't typically buy two or three in a row. But with [SVOD], the typical behavior is that they will," LaJoie explains.
That's why TWC is considering changing the way the client application works. A better process might involve setting the session up when a sub orders his first viewing, but not tearing that session down until he actually exits the application, LaJoie explains. Instead of having to set up multiple sessions for each sub every time he accesses the application, only one is set up.
Advice from the SVOD Front -- "Execute deliberate traffic analysis before you make aggressive offers in the marketplace. Be deliberate about understanding the way your customer base is going to respond, and understand the usage characteristics," LaJoie advises engineers who are planning an SVOD trial. "One of the assumptions we made was that the behavior would be very similar to what you would find with movies-on-demand. That was a flawed assumption."
But What About Content? -- While the network conditions for VOD are ripe, content owners haven't fallen all over themselves to offer their stuff for VOD distribution. That's not an engineering issue per se, but the topic does tend to pop up in VOD technical seminars. That's because a super-VOD system isn't any good without something to put on it.
If that's what's stalling your VOD plans, some content news last week could get things hopping again. A major studio, Vivendi Universal, and cable's largest PPV provider, iN Demand, cut a multi-year agreement that covers all of Universal's output during the life of the deal plus some library and TV product. The agreement, which goes into affect Aug. 1, bodes well for VOD at AOLTW, AT&T Broadband, Comcast and Cox since iN Demand is their joint venture. |
