Cablers Start a Fire Under VOD Plans

Apr 12, 2004  •  Post A Comment

Cable operators are facing a critical juncture in the video-on-demand business.
The technology has been proven and so has the consumer interest-at least in the markets where operators have invested sufficient marketing muscle to attract viewers’ attention.
But operators need to push the service in other markets, too, because cable’s competitor, satellite, is growing ever stronger with its answer to VOD: the digital video recorder.
Cable operators have also introduced DVRs, but only 38 percent of cable subscribers are aware that they can get DVR service from their cable operators, compared with 78 percent of satellite customers, according to the annual State of Cable & Broadband Study released by Horowitz Associates in late February.
That makes it even more imperative for cable operators to provide a little rocket fuel behind VOD, a service that is unique to cable, that satellite operators can’t offer and which many cable operators believe will be the tool that stems digital churn.
Cable operators are trying various marketing tactics. Here’s a roundup of what’s working:
Universal Television Distribution
Experimenting With Windows and Double Features
Most movies currently have VOD release windows about 45 days after the film hits the video store.
Universal is working to change that. Universal is considering day and date parity with the video store for a few titles it plans to offer in the next few months, said Stacey Melle, VP, worldwide marketing, pay-per-view and video-on-demand, for Universal Television Distribution. Universal also plans to offer some titles only 30 days after the home video window, rather than 45. “It’s something operators have been asking for. We want to experiment and see what it does to the revenue picture,” she said.
The studio has also tried various marketing strategies to boost VOD service. Universal frequently makes double features available on-demand for one price, pairing a current title with a library title, such as the current “Intolerable Cruelty”/“Out of Sight” George Clooney double bill.
Ms. Melle would not reveal buy rates for the double features but said operators are asking for more. Many operators have also created a separate feature on the on-demand guide listing double features, she said.
Universal plans to introduce a new series of spots starting with its April titles that will demonstrate the functionality of on-demand in the commercials themselves. For instance, starting April 22, spots for the movie “Honey” will show the film being fast-forwarded and stopped to illustrate on-demand capability.
TV Guide Interactive
Promotional Spots on Linear Channel Boost VOD Usage
TV Guide Interactive created for operators a two-minute promotional segment that highlights three new on-demand movies every hour and up to 24 different movies a month. Those spots air during the cable system’s local avails on the TV Guide Channel, which reaches 60 million cable homes with its array of cable content previews. Currently, cable systems representing 11.3 million subscribers have initiated the promotion.
The VOD buy rates were 39 percent higher in digital homes that had TV Guide Channel in addition to access to VOD than in those that did not have TV Guide Channel. This points to the effectiveness of TV Guide Channel’s promotions of VOD in helping to drive VOD buy rates, said Amy Bates, senior VP, TV Guide affiliate marketing.
TV Guide Interactive, TV Guide’s interactive program guide, is available in 12 million cable homes, and 2 million of those homes have access to VOD services.
Mag Rack
Local Events and Content Are Key
Rainbow Media-owned Mag Rack, with its offering of on-demand “video magazines” on niche topics such as yoga, cars and bird watching, is now deployed with five cable operators. To promote the Mag Rack service, the VOD company has partnered with local cable systems at local events.
For instance, Mag Rack has worked with Mediacom on three affinity marketing events since November. At an environmental fair and art show in Rock Island, Ill., in January, Kenn Kaufman, author and host of Mag Rack’s “BirdSight,” signed books for show attendees.
In Mobile, Ala., in November, Mag Rack supported the system at the Past Time Cruisers “Cars for a Cause” annual classic car show, where it demonstrated the on-demand service at a co-branded booth, with a focus on Mag Rack videos “Classic Cars” and “Your Next Car.”
Mediacom does not have specific data detailing the effectiveness of such local promotional efforts, but the value lies in providing the localism that satellite can’t offer, said Scott Westerman, a regional VP with Mediacom.
“If we do our job on the local side of the fence, people will think twice about leaving for satellite,” he said.