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To: Don Hand who wrote (17472)	4/17/2002 9:55:56 AM
From: Don Hand	Read Replies (1) \| Respond to of 21143

Cox raises stakes with video-on-demand service You'll see what you want when you want By Jennifer Davies STAFF WRITER April 17, 2002 In the future, when you ask what's on TV, the answer may be: anything you want. At least that's what Cox Communications and other cable companies are planning. Cox is taking the first step toward that future today when it launches a video-on-demand service to some 170,000 digital cable customers in San Diego County. It is the first market for Cox's new service. With video-on-demand, customers can choose from hundreds of movie titles including such comedy classics as "Caddy Shack" as well as recent releases such as the Anthony Hopkins' "Hearts in Atlantis." The service is unlike Cox's pay-per-view offering, which only has a few movies that play at set times. For $3.95, video-on-demand customers can download a movie and watch it at any time in a 24-hour period, even rewinding, pausing and fast-forwarding as needed. The service essentially transforms the cable set-top box into a VCR. "Whenever we've surveyed people about what they want, the message always came back the same," said Art Reynolds, Cox's vice president of marketing for San Diego. "I want to watch what I want to watch when I want to watch it." Video-on-demand is seen as critical both for Cox and the cable industry as they try to attract and retain customers for high-end digital television. Since 1996, the cable industry has invested $55 billion to build fiber-optic networks capable of offering services such as high-speed Internet and digital television. Digital cable has been a growth business, with 21 percent of all cable television customers paying extra for the service. Cox estimates that 31 percent of its customers now subscribe to digital cable. But several companies, such as Charter Communications and Comcast Corp., have warned of a slowdown in subscriptions. To pump up demand, cable companies are introducing video-on-demand service. Comcast recently launched service to 222,000 digital cable customers in southern New Jersey. "Most of the cable companies feel that video-on-demand is an important factor in signing up new customers," said Mark Kersey, an industry analyst for ARS Inc., a La Jolla market research firm. Video-on-demand also could help Cox siphon business from satellite TV companies, as well as local video stores. Even prime-time programming might be affected, because video-on-demand could change the way people watch television, Reynolds said. In the future, customers will be able to pay to watch the shows they want, such as "The Sopranos" and "Sex and the City," whenever they want and won't be beholden to pre-set times. Already past episodes of Comedy Central's ribald cartoon "South Park" are available. "It's the end of network prime-time schedules as we know them," Reynolds said. For video stores, the new service could be a real-life horror movie as cable companies slash into their profits, industry insiders say. "The cable companies would certainly like to think that the way to position video-on-demand is the need to get rid of the hassle of running to Blockbuster," Kersey said. But don't write the obituary for the local video store just yet. Cox's video-on-demand service has only 150 to 200 movie titles, many of them obscure. That's partly because three major studios still haven't made deals to provide movies to the service. "It is going to take a while for Cox and the other cable companies to get a nice selection of movies that people will actually be willing to pay for," Kersey said. uniontrib.com