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K.C. Neel
Concurrent Computer is developing a new video server that will eventually enable cable operators to offer video-on-demand services that will include a personal video channel.
The service will allow customers to download time-shifted content much the way TiVo and Replay Networks' technology works. Unlike those technologies, a consumer doesn't have to plan to record the shows prior to them being televised, according to Jack Bryant, president of Concurrent's Extreme VOD division.
Concurrent expects to start a limited field trial with an undisclosed MSO to test the PVC service within the next three months, Bryant says.
"Clearly, there are several issues to be worked out, including copyright, before the service can be rolled out commercially," he says. But the service could provide operators with a significant amount of financial upside if all the issues are settled.
As those copyright issues are resolved, though, Bryant believes VOD applications will expand into new arenas.
"VOD will take on broad applications far beyond movies as storage costs come down and copyright issues are resolved," he says. "Once you buy the content and put it into the server, the cost to store that content is relatively small."
He envisions the day when a consumer can order an international soccer match or his/her kids' weekly high school football game.
"I realize that a concept like a local high school game requires some local production, but more operators are taking those issues on now every day," he says.
Concurrent will also unveil its new MediaHawk Model 2000 video server at the Western Show in Los Angeles next month. The company has developed a complete backoffice management system that works with the server so operators can manage content and fulfillment, as well as gather subscriber demographic information, transaction and usage analysis.
The VOD market has been slow to get off the ground. Bryant figures only 8% of the country's digital customer base will be VOD-enabled by year's-end. Within four years, he expects 95% of the projected 40 million digital customers to have access to VOD technology.
At this point, Concurrent's technology and software is compatible with all the major set-top manufacturers, Bryant says.
"Right now, we're the only VOD company that can claim that," he says. "That, of course, will change over time. But we're there now."
Time Warner Cable, in its VOD rollouts in Hawaii and Tampa, Fla., is using the company's servers and backoffice software. It's also in talks with all the other major MSOs, Bryant says. The company is working with Motorola and Comcast in an undisclosed Comcast system trial and is helping Cox Communications roll out VOD in its San Diego, Calif., and Phoenix, Ariz., markets now.
Cox is making its VOD product available to about 2,000 homes in San Diego. A commercial rollout of the product in Phoenix is expected to begin sometime late in the 2001 first quarter, Bryant says.
The business is small today but is exploding. Concurrent posted total fiscal 1999 revenues from VOD of less than $1 million. By the end of the fiscal year 2000, which ended June 30, the company recorded revenues of more than $5 million.
The business is finally beginning to take off, Bryant says, because transmission costs are coming down and the number of digital subscribers is going up. In 1996 when Time Warner was experimenting with its Full Service Network in Orlando, Fla., it cost $10,000 for each video stream. Today, that cost is about $400, and Bryant predicts the cost per stream will dip to around $285 by 2004. Within five years, the company predicts the VOD market to be a $2.8 billion business.
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