Diva shoots for satellite delivery as business grows

Jul 23, 2001  •  Post A Comment

Diva, one of the last remaining video-on-demand service providers to load its content manually, tape-by-tape, into cable operators’ headend equipment, is now mirroring the practices of competitors iN Demand and TVN by switching to a satellite distribution model.
“It’s been publicly acknowledged for years that we have to move to satellite transport of content,” said Neil Goldberg, Diva’s vice president of entertainment, adding that Diva’s satellite video transport initiative is “not something that’s happening yet, but it’s under way.”
Diva, which develops server and software technologies that enable cable operators to send libraries of content to customers’ digital set-top boxes, will likely need to partner with a satellite technology provider to get its satellite distribution project off the ground. For instance, General Electric Co. leases satellite transponders to other VOD service providers. At deadline last week, General Electric was rumored to be nearing a lease renewal agreement with one such provider.
Several other technology vendors have also entered the VOD satellite transport space, including Pathfire and N2 Broadband. N2, which was established early last year by a group of technicians who defected from set-top box manufacturer Scientific-Atlanta, already has come to market with tools that send VOD content up to satellites and then channel it down from the satellites onto servers near cable operators’ headends. N2 counts VOD service provider iN Demand and entertainment studio Warner Bros. as two of its first clients.
Warner Bros., which is partnering with N2 to perform video monitoring for Diva, is not entering the VOD market as a full-fledged service provider that would compete with Diva, iN Demand, or TVN-contrary to a market rumor that was circulating last week.
N2 was awarded its first round of funding earlier this month. The financing, which is believed to be in the $5 million to $10 million range, was provided by a group of investors led by former WebMD CEO Jeff Arnold. AOL Time Warner also provided some of the investment.
Diva’s change in trajectory comes just as it is drawing on its strong relationship with cable operator Charter Communications by launching its VOD service in additional cities served by the multiple system operator.
Having introduced its service for Charter digital cable customers in Greenville, S.C., and Hickory, N.C., in June, Diva’s video package was launched on Charter systems in Slidell, La., and Long Beach, Calif., earlier this month. Next month, Diva service is expected to commence in the MSO’s Birmingham, Ala., and Glendale, Calif., markets.
Although Diva has assembled a VOD content library of its own and has changed its position several times about whether its business is limited to technology or includes content aggregation as well, the company now appears to be using its technology to fortify the VOD content offered by financial partner Starz Encore Group. The cable pay-per-view network, which made a $5 million investment in Diva in May 2000, is testing subscription VOD on an Adelphia system in the Cleveland area.
“We take companies like Starz and power them with the ability to put together a subscription package,” Diva’s Mr. Goldberg said, noting that Diva still offers a subscription VOD package of its own for MSOs that choose to deploy it.
Greg DePrez, Starz Encore vice president of subscription video on demand, said the cable subscription network is working in tandem with Diva.
“We are talking to all the [MSOs] that are working with Diva and are making very good trial plans with Diva’s clients,” Mr. DePrez said. “They haven’t specifically announced publicly that they’re working with us, but we think it’s entirely possible that we will be working with all of Diva’s clients.”