As Adelphia executives shepherd the multiple system operator’s emergence from bankruptcy and move it toward profitability, they are focusing on the company’s video-on-demand service. To that end, Adelphia has struck a deal with VOD software company Everstream to help it get a better handle on who’s using the VOD service, where and how often-and on how well the service is holding up technically.
The deal is noteworthy for Adelphia because it helps the operator return to the “normal” business of introducing new services. It’s noteworthy for the industry because it’s part of a larger movement to thoroughly understand the VOD business.
Comcast has been testing Everstream’s service in its Detroit and Chicago markets but has not announced plans for a companywide rollout, said Everstream President Steve McHale. If that occurs, Everstream would then count the nation’s two biggest operators in its camp: It started servicing Time Warner Cable earlier this year. The VOD software company planned to reach out aggressively to other MSOs at last week’s CTAM conference in Los Angeles.
The software, which produces trends and usage data on VOD, will provide a report card for Adelphia on its VOD deployment, said John Roy, director of advanced video engineering and development at Adelphia.
“You’re not going to improve anything unless you report on it. This allows you to create a scorecard of success on VOD,” he said. “It helps us make sure the systems are working, and fine-tune so [customers] have the best experience.”
Adelphia has deployed VOD in three markets-Bethel Park, Pa., Cleveland and Los Angeles. Cleveland and Bethel Park were launched in 2002 before Adelphia spiraled into bankruptcy due to the alleged activities of the controlling Rigas family. “We just didn’t expand [VOD] any further because of the bankruptcy,” Mr. Roy said.
That’s changed now. The operator is in the process of relaunching VOD in Bethel Park and Cleveland and expanding more deeply into Los Angeles. Adelphia plans to reach 50 percent of its digital footprint, or about 1.1 million of its 2.2 million digital cable customers, with VOD service by the end of the year. Adelphia’s total customer count is 5.4 million.
These investments by Adelphia underscore that for it to be viable in the core cable business it must invest in new services, too, said Bruce Leichtman, president of Leichtman Research Group. “Now VOD and DVRs represent both a defense, against losing subs, losing digital subs and losing premium subs, as well as an offense [in terms of] revenue generation,” he said.
The software will allow Adelphia to streamline its VOD business with better companywide and system reports and to reduce headcount and expenses, Mr. Roy said.
Everstream’s software offers a detailed analysis of how each market’s VOD system is performing in operational and subscriber measures, such as number of active subscribers, average revenue per subscriber, streams served and failed sessions. If an operator knew that 40 percent of customers in a certain market did not use VOD at all, it could try to reach those customers through a direct-mail campaign, for instance, to promote the service.
“It really allows you to see the success of marketing campaigns,” Mr. Roy said. It also provides a companywide view of the VOD service.
As part of the trend to use software tools to understand better what VOD viewers want, Scripps Networks began testing DVD-like “chapters” for its on-demand shows with Time Warner Cable of Maine about a month ago. VOD-indexing software from Gotuit allows Scripps VOD viewers to jump directly to segments within the VOD shows, such as a section on window treatments or faux finishes, said Channing Dawson, senior VP, emerging media, for Scripps Networks.
Through the test, Scripps wants to learn which segments of which shows are most popular so it can tweak its product offering, he said.
“We’re working with Time Warner to figure out how to push [VOD] out a little bit further to make it easier to navigate and easier to use the content,” Mr. Dawson said.
Scripps offers on-demand content for HGTV, Food Network, DIY: Do It Yourself and Fine Living.