Post by dkennedy on Jun 30, 2005 4:59:56 GMT -5
CABLERS LACK HIGH-DEF CONTENT FOR VOD
At Kagan Summit, execs blame piracy concerns
June 29, 2005
By Paul Sweeting, VideoBusiness.com News
Pity the poor cable operator.
"For the first time, cable is actually in the lead in deploying something," Time Warner Cable digital services director Glen Hardin said Tuesday, referring to on-demand access to high-definition movies and TV shows.
"You can't go to Blockbuster and rent it yet," Hardin said. "You can't get it on demand from satellite. We can actually do it."
If only video-on-demand service providers could get access to high-def programming from the studios.
According to Hardin and others here at the Kagan Research VOD Summit, fear of piracy and a reluctance to let VOD colonize the high-def world before a DVD version is available have led the studios to keep their most valuable high-def content under wraps.
"High-def DVD hasn't come out yet. So if you're the studios, do you want to have a high-def product in the marketplace that's more convenient than DVD?" InDemand president-CEO Rob Jacobson said. "DVD has been a phenomenal product for Hollywood. They don't want cable operators to come out with a better product that isn't as profitable to them."
Jacobson predicted that studio attitudes toward a high-def VOD service would not begin to soften until a high-def DVD format is established in the market.
"Right now, they can't even decide on which format," Jacobson quipped.
According to Showtime Networks executive VP Mark Greenberg, however, producers' fears about high-def piracy also is a factor.
"It's one thing to say your [VOD] system is secure, but 'copy-never' is not a term operators want to have in a contract," Greenberg said. "But as a programmer, you don't want to have an 'oh nuts' clause in there either. You don't want to have to go to your boss at some point and say, 'I gave away our high-def business,' or 'I thought it was secure.' HBO made $400 million last year selling DVDs of Sex and the City and they're not going risk that. We've all learned our lesson from Napster."
High-def VOD content also is caught between programmers' desire to charge a premium for high-def programming and cable operators' drive to include as much on-demand programming as possible on free or subscription VOD tiers.
"All of the deals being done today for pay-TV include SVOD rights, but we see an opportunity to get consumers who have a great appetite for high-def programming to pay," Greenberg said. "I think giving [high-def] away would be a real economic problem for the industry."
The NFL Network, which has extensive VOD offerings and produces thousands of hours of high-def content, has so far put none of its high-def programming on its VOD service, according to finance and strategy director Brian Rolapp. "We're still trying to figure out how to monetize it," he said.
While VOD proponents at the summit predicted that on-demand usage will surge once more high-def programming is available, Kagan analysts continue to forecast very modest growth in movies-on-demand.
According to Kagan estimates, total cable VOD revenue from non-adult movies in 2004 was only $330 million, growing to $530 million this year. Kagan does not see movie VOD revenue topping $1 billion until 2007.
Other analysts are even less bullish.
Adams Media Research puts 2004 movie VOD revenue at $344 million, but does not see that segment topping $1 billion until 2008 (see chart, page 1).
Showtime's Greenberg is less sure that high-def will propel VOD usage.
"If you look at the data, there are something like 12 million HDTV sets out there, but only a third of them have the proper receiver to actually get high-def programming," he said. "People see 'In HD where available' on the screen, and they're watching it on their big, expensive new TV set that looks a lot better than their old set, and they think they're watching high-def, even though in most cases they're not. We need to do a lot of consumer education."
At Kagan Summit, execs blame piracy concerns
June 29, 2005
By Paul Sweeting, VideoBusiness.com News
Pity the poor cable operator.
"For the first time, cable is actually in the lead in deploying something," Time Warner Cable digital services director Glen Hardin said Tuesday, referring to on-demand access to high-definition movies and TV shows.
"You can't go to Blockbuster and rent it yet," Hardin said. "You can't get it on demand from satellite. We can actually do it."
If only video-on-demand service providers could get access to high-def programming from the studios.
According to Hardin and others here at the Kagan Research VOD Summit, fear of piracy and a reluctance to let VOD colonize the high-def world before a DVD version is available have led the studios to keep their most valuable high-def content under wraps.
"High-def DVD hasn't come out yet. So if you're the studios, do you want to have a high-def product in the marketplace that's more convenient than DVD?" InDemand president-CEO Rob Jacobson said. "DVD has been a phenomenal product for Hollywood. They don't want cable operators to come out with a better product that isn't as profitable to them."
Jacobson predicted that studio attitudes toward a high-def VOD service would not begin to soften until a high-def DVD format is established in the market.
"Right now, they can't even decide on which format," Jacobson quipped.
According to Showtime Networks executive VP Mark Greenberg, however, producers' fears about high-def piracy also is a factor.
"It's one thing to say your [VOD] system is secure, but 'copy-never' is not a term operators want to have in a contract," Greenberg said. "But as a programmer, you don't want to have an 'oh nuts' clause in there either. You don't want to have to go to your boss at some point and say, 'I gave away our high-def business,' or 'I thought it was secure.' HBO made $400 million last year selling DVDs of Sex and the City and they're not going risk that. We've all learned our lesson from Napster."
High-def VOD content also is caught between programmers' desire to charge a premium for high-def programming and cable operators' drive to include as much on-demand programming as possible on free or subscription VOD tiers.
"All of the deals being done today for pay-TV include SVOD rights, but we see an opportunity to get consumers who have a great appetite for high-def programming to pay," Greenberg said. "I think giving [high-def] away would be a real economic problem for the industry."
The NFL Network, which has extensive VOD offerings and produces thousands of hours of high-def content, has so far put none of its high-def programming on its VOD service, according to finance and strategy director Brian Rolapp. "We're still trying to figure out how to monetize it," he said.
While VOD proponents at the summit predicted that on-demand usage will surge once more high-def programming is available, Kagan analysts continue to forecast very modest growth in movies-on-demand.
According to Kagan estimates, total cable VOD revenue from non-adult movies in 2004 was only $330 million, growing to $530 million this year. Kagan does not see movie VOD revenue topping $1 billion until 2007.
Other analysts are even less bullish.
Adams Media Research puts 2004 movie VOD revenue at $344 million, but does not see that segment topping $1 billion until 2008 (see chart, page 1).
Showtime's Greenberg is less sure that high-def will propel VOD usage.
"If you look at the data, there are something like 12 million HDTV sets out there, but only a third of them have the proper receiver to actually get high-def programming," he said. "People see 'In HD where available' on the screen, and they're watching it on their big, expensive new TV set that looks a lot better than their old set, and they think they're watching high-def, even though in most cases they're not. We need to do a lot of consumer education."