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Universal Music, Diva playing VOD tune

Jun 18, 2001  •  Post A Comment

Universal Music Group plans to launch by next year a music-video-on-demand service called The Viewing Lounge that will recommend video clips to customers based on their viewing habits, according to UMG Senior Vice President of Marketing Lisa Farris.
The first-of-its-kind subscription offering for cable audiences, which streams selected video segments recorded by Universal artists, will animate viewers’ remote controls with the functionality of a virtual VCR, Ms. Farris told Electronic Media.
That robust VOD package won’t be launched until UMG finalizes how much it should charge consumers for the service. To decide on a price, the record label must first resolve how much it will compensate its artists for each video clip selected. A musician’s cut of the profits is the key variable that will determine the cost burden Universal will assume in providing the service, Ms. Farris said.
Regardless of those lingering uncertainties, UMG will surge ahead later this year with a more limited precursor to the forthcoming complete VOD offering. The near-video-on-demand channel, which won’t feature the fuller VOD service’s suggestion engine or VCR functionality, will only allow audiences to select from its menu of videos a half-hour of music video shorts at a time. But even the modest assortment of videos will include approximately 500 titles, Ms. Farris noted. “Our target is to have over 500 [individual clips] when we launch,” she said.
Universal Music’s newfound self-assurance about the direction of its long-planned customizable video source stems from its just-signed partnership with cable video-on-demand vendor Diva. The server and software specialist will incorporate The Viewing Lounge into its broader VOD service, which also includes a wide array of television reruns and films (shown approximately six to 12 months after their initial theatrical release) that cable customers can order via their remote controls.
“Diva has always envisioned VOD as being more than just movies,” said Bev Doughty, the company’s vice president of programming and marketing.
While Diva’s core business remains building video servers and software for cable operators, the technology purveyor has also cast itself in the unlikely role of VOD content aggregator. Having already licensed titles from film studios Universal, Warner Bros., DreamWorks and Artisan to fill its pipeline of movies for transaction-based VOD, Diva is also expecting to feature under its banner films from Starz! Encore’s collection as part of a subscription VOD package. Last May, Diva announced that it received a $5 million equity investment from Starz!
Sources close to Diva indicate, however, that the company may not stay in the video-on-demand content-aggregation business that complements its primary technology specialty for the long haul. In the VOD content niche, the cable infrastructure specialist is trying to compete against iN Demand, which is owned by the nation’s largest multiple system operators.
When the wrinkles in The Viewing Lounge’s launch strategy are finally ironed out, the music video service will be available in all the markets that Diva currently reaches through its partnerships with cable operators. Those locales are Pasadena, Calif. (Charter); Atlanta (Charter and AT&T Broadband); Dallas/Fort Worth (Charter); St. Louis (Charter); Rockford, Ill. (Insight); Columbus, Ohio (Insight); and Evansville, Ind. (Insight).