It’s Showtime for subscription VOD

Sep 24, 2001  •  Post A Comment

Showtime Networks is developing a subscription video-on-demand service that will feature roughly equal portions of the cable pay channel’s original programming and recent theatrical film releases.
“At this point it’s about half theatrical and half original, but that may change as we get more feedback [from consumer tests],” said Mark Greenberg, Showtime Networks’ executive VP of corporate strategy and communications.
HBO is also crafting an SVOD offering that will combine its previously aired in-house productions with theatrical fare. By contrast, other first-movers in the budding SVOD industry appear to be gravitating toward only one of the two SVOD content categories-originals or theatricals. Starz Encore’s service will be composed almost exclusively of theatrical releases, while Discovery Networks and Playboy TV are creating SVOD packages that will emphasize the original programs previously aired on their scheduled-programming channels.
Although multiple system operator Adelphia has rolled out the SVOD in the Cleveland area, Mr. Greenberg said most other operators are taking a more cautious approach toward the service. “We’re seeing a number of MSOs not being as aggressive as [Adelphia] but [rather] testing the right business model.”
One chief concern among cable industry participants about the medium is whether consumers will be willing to pay operators any significant amount for an SVOD service, especially considering the sluggish economic climate. Cable networks that already follow a subscription-based pricing model, such as Showtime, Starz!-Encore and HBO, could benefit from even moderately priced SVOD if the service could play a promotional role by stimulating further consumer demand for their scheduled-programming channels. But the cable industry would naturally need to recoup some of the cost of acquiring and marketing SVOD content by charging customers a premium.
“There’s still a lot of uncertainty about pricing,” Mr. Greenberg said, adding, “We believe there is a consumer appetite and a willingness to pay for it.”
To succeed, the cable SVOD industry not only will have to fend off competition from providers of “a la carte VOD” (services that bill customers for each program ordered rather than charging a single monthly fee), such as iN Demand, but also must contend with a new challenge from film studios, which recently unveiled plans to launch Internet “VOD” services of their own. Details of how the studios’ online offerings will actually work, however-such as whether the time necessary to download those films would prevent those services from becoming contenders in the VOD arena, and whether the studios’ films could be accessed on the Web or only over closed broadband networks-remain unclear.
Showtime’s original programming offerings include series such as “The Chris Isaak Show,” “Resurrection Blvd.” and “Queer as Folk,” as well as numerous original movies.