Will subscription video-on-demand (SVOD) make consumers toss away their video rental cards? Or will the inevitable marketing lures needed to make the service catch on just end up crimping profit margins at cable companies?

Such questions were entertained last week by a panel of industry executives attending the annual pre-Western Cable Show luncheon in Anaheim, Calif., sponsored by the Cable & Telecommunications Association for Marketing (CTAM).

SVOD ? which would give subscribers on-demand access to a menu of Hollywood films, series and specials for an extra fee on their monthly cable bill ? has become the topic of the moment among cable executives, who believe that it may be the industry's next major revenue stream.

Executives are still grappling with the best way to manage the service, which operators such as Time Warner Cable and Adelphia Communications are currently testing.

Time Warner is testing HBO on demand at $3.95, $6.95 and $9.95 a month, while Adelphia is offering Starz Encore's SVOD service free as part of a digital premium package.

The loss leader approach hasn't won universal praise. ?That's some really good content to be giving away for free,? remarked Mike LaJoie, VP of corporate development at Time Warner Cable, after the session.

Another panelist, Eileen Martin, area manager of the Adelphia system in Cleveland, Ohio, which is now testing VOD, said she hoped SVOD is ?going to prevent people from jumping ship, get them to upgrade to digital, upgrade to premium.? She mentioned a consumer who told a focus group that he had stopped renting videos at Blockbuster now that he had SVOD.

Other panelists at the 90-minute session were Ken Boenish, president, the Erotic Networks; Peter C. Boylan III, co-president & COO, Gemstar-TV Guide International; Stephen A. Brenner, president & CEO, In Demand; Larry Jacobson, president & COO, Real Networks; and Holly Leff-Pressman, SVP of worldwide pay-per-view and video-on-demand at Universal Studios.

The session was moderated by Larry Gerbrandt, chief content officer of Kagan World Media, which is, like Cable World, a unit of Media Central.

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