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Discovery venturing into SVOD territory

Aug 13, 2001  •  Post A Comment

Discovery Networks is developing what could become the first video-on-demand service from a nonpremium cable network that would be billed on a subscription basis.
While some cable video-on-demand content aggregation companies, such as Diva, iN Demand and TVN, are assembling a collection of VOD content that viewers would pay for on a title-by-title basis, premium programming channels HBO and Starz!-Encore are creating separate VOD services to further their brands in the digital era. Those premium channels are hoping to convert the base of premium subscribers already in their grasp to a new billing system that would charge digital cable customers for a package that would include both a video-on-demand service and scheduled premium programming channels.
Discovery’s entrance into the subscription video-on-demand business signals that the nascent VOD industry’s marriage of broadband technologies and branded television content may prompt traditional cable programmers to adopt the subscription billing models that premium channels HBO, Showtime and Starz!-Encore have long followed.
Discovery’s project is being launched to satisfy multiple system operators’ appetite for subscription VOD services similar to the one HBO is testing on a Time Warner Cable system in Columbia, S.C.
“Lately operators have encouraged us to develop an SVOD product,” said Clint Stinchcomb, vice president of new media at Discovery Networks. “You’re seeing other networks get into this area.”
Time Warner Cable spokesman Mike Luftman confirmed that the MSO is among the operators that have asked programmers to create new SVOD services.
“We’ve expressed interest in SVOD from a wide range of vendors-some of them premium networks but others as well,” Mr. Luftman said. “We believe SVOD will work the best when the maximum amount of content is available.”
Development of Discovery’s SVOD offering is still in its preliminary stages, Mr. Stinchcomb said. However, he said Discovery’s service may feature a menu of on-demand programming categories, such as history, animals, health or travel, that digital cable customers could navigate via their remote controls. He said the network’s SVOD package would probably be co-branded with the name of the cable operator offering the service on its system.
Other cable programmers, such as Court TV, are also exploring the possibility of offering SVOD. “MSOs have come to us asking if we have content that could be part of an SVOD channel,” said Glenn Moss, senior vice president of business affairs and affiliate relations at Court TV. “If that’s how you do it rather than getting [VOD content] from an aggregator, that’s fine.”
Court TV, which holds more than 100,000 hours of taped programming in its library, is planning to soon convert those tape reels into digital format. The cable network is undertaking the digital initiative to ready its content for inclusion in a searchable digital VOD collection, Mr. Moss said. Once that project is completed, viewers will be able to navigate through Court TV’s archives of trial and documentary footage, he said.
To be sure, not all cable industry participants are convinced that nonpremium networks will face a smooth transition into the subscription TV marketplace.
“If a new company comes in and tries to sell subscription services, they’ve got a big challenge because in the beginning they’ll have exactly zero subscribers,” said Greg DePrez, vice president of subscription video on demand at Starz Encore Group. “But some networks may want to take that [subscription-based] approach.”