Niche Nets Arise as VOD Advances

Feb 23, 2004  •  Post A Comment

As video-on-demand moves beyond the early-adopter phase and into the common lexicon, increasingly smaller and more specialized VOD services have sprouted up.
Their presence raises the question of what content will survive in the VOD world. Many of the successful niche services agree that leverage is the key for a lesser-known on-demand brand.
Emerging and growing VOD services like Anime Network, Studio 4 Networks, My Music Choice and others that don’t have the big-name cachet of an HBO or a Showtime have dealt with the critical issue of how to brand their services in a VOD world that is becoming increasingly cluttered.
Music Choice is planning a June launch of its new on-demand service, My Music Choice, which allows users to create their own digital music channels from more than 100,000 combinations available. “If you like to hear pop music and top 40 but not rap, you can take our hit list and take all the rap out. Or if you want to combine classic rock with alternative rock, you can,” said David Del Beccaro, CEO of Music Choice.
The service debuted in Moline, Ill., on MediaCom late last year and is available to about 25,000 digital cable homes, but the national launch will come in June.
The parent service, Music Choice, provides digital music channels and exclusive music shows to about 33 million homes, including 95 percent of digital cable homes and 100 percent of DirecTV homes. My Music Choice is the company’s play in the VOD world, and it hopes to gain traction by leveraging the Music Choice brand.
On the 45 linear music channels for Music Choice, a button appears on the screen for on-demand service My Music Choice, allowing viewers to access the on-demand portal through the linear music channels.
That will help the service stand out, Mr. Del Becarro said. To attract users, on-demand programming needs to either be compelling content, such as what is found on HBO, or offer something very useful, he said. “The reason we will stand out in the VOD interface is because we are so different,” he said. “With most services you don’t get to create anything or affect anything.”
Branding firm 3 Ring Circus has been charged with helping Studio 4 Networks get noticed in the on-demand world. The Studio 4 service, which consists of fitness and education videos, is carried in 5 million homes, including those served by Comcast, Adelphia, Charter, Insight and MediaCom, said John Sideropoulos, CEO of 3 Ring Circus.
He said the key to getting carriage for a niche service such as Studio 4 has been to emphasize the fact that Studio 4 Networks has unique programming that can’t be found elsewhere. “This made it easier to sell the product. It’s successful because [Studio 4] isn’t offering another movie,” he said.
Anime Network, which is solely a VOD service offering the popular Japanese animation, has made quite a name for itself as a niche service on operators’ on-demand platforms, including Comcast, Time Warner and Cablevision.
Anime is one of the top-performing networks on Comcast, with double the views per user of Comcast’s next most-watched on-demand network, said Cathy Rasenberger, who handles marketing and distribution for Anime. Comcast does not disclose the specific ranks of content partners for its on-demand service.
What has helped Anime is that it is part of a larger company, A.D. Vision, which includes home video distribution, novels, comic books and toy merchandising for the entire anime genre. That allows Anime Network access to a number of targeted channels to promote the VOD service.
Despite some successes, VOD is still in the early stages for the niche players, said Bruce Leichtman, president of Leichtman Research Group. “It’s so reminiscent of the early days of broadband. Unless you’re in it for the long run, it’s going to be a real challenge,” he said.
To date, the cable industry has been effective in promoting VOD. According to a CTAM study released earlier this month, about half of all respondents were familiar with VOD, while 74 percent of digital cable customers were familiar with the service.