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Cablevision VOD Gets Physical

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
2/4/2008
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Cablevision Systems Corp. (NYSE: CVC) is in the DVD distribution business, in a roundabout way. (See Cablevision Bows DVD Service.)

Putting a new twist on the so-called "day-and-date" concept, the New York-based MSO has teamed with Popcorn Home Entertainment on a service that allows cable customers to watch films via video-on-demand (VOD) the same day they are released in stores on DVD, so long as they also agree to pay for the physical DVD, as well.

Under the arrangement, Popcorn Home Entertainment will send the physical DVD directly to customers after they order the move from Cablevision's VOD service. The DVD will be delivered "within days" of the original order on VOD, according to Popcorn.

At the start, some titles that apply for the DVD-VOD combo include Universal Studio Home Entertainment flicks such as The Born Ultimatum, The Kingdom, Eastern Promises, and American Gangster, which becomes available February 19.

According to the site, Elizabeth: The Golden Age, starring Cate Blanchett and Geoffrey Rush, is slated to become available tomorrow (February 5).

Customers who want immediate VOD access and the physical DVD copy will pay a premium. New releases marketed by Cablevision and Popcorn will sell for $19.95 each, plus shipping and handling. Older, "library" titles will go for $9.95 and $15.95. By comparison, Cablevision rents new VOD titles (including some in hi-def format, and without the DVD element) for $4.95 each.

The cable partnership, the first for Popcorn, marks the latest effort by the cable industry to tighten VOD windows. Popcorn said it will offer titles to consumers 30 to 45 days prior to the traditional VOD distribution window.

Following a soft launch that started several weeks ago, the DVD-VOD service is available to Cablevision's base of 2.6 million iO: Interactive Optimum digital video subscribers, according to an MSO spokesman. He would not say how the service performed in the ramp-up to Monday's official launch.

To gain access to the Popcorn/DVD offer, Cablevision customers must first complete a secure profile on the Web, and provide their credit card, shipping and billing information. Customers will then gain access to titles available through the Popcorn deal via the Cablevision on-demand menu or directly on channel 500.

The new DVD-VOD service marks "a major step forward in giving our customers new ways to quickly and easily purchase goods and services from a wide variety of companies, using our fiber optic network and the advanced set-top box that is already in the home," said Cablevision EVP of digital marketing & commerce Patricia Gottesman, in a statement.

More cable deals could be in the works for Popcorn Home Entertainment, which is helmed by Steve Brenner, the former president and CEO of In Demand LLC , the pay-per-view/VOD joint venture of Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Cox Communications Inc. . Before that, Brenner was president of USA Networks. Company officials were not immediately available Monday for further comment about its cable strategy, or how it divides revenues with cable operator and studio partners.

Cable has shown a keen interest in tightening distribution windows in order to push VOD usage and revenues.

Comcast, for example, has been testing a day-and-date VOD service in Denver and Pittsburgh. The MSO launched a similar offering in Atlanta last October, according to a company spokesman.

Comcast has not released specific usage figures from its day-and-date tests, but the MSO has maintained that they have not cannibalized DVD sales. At The Cable Show last year, Comcast COO Steve Burke suggested that consumers would be willing to spend as much as $50 to watch movies at home in the theater release window. (See Cable's Day & Date Champion and Box Office Tizzy .)

In 2006, Comcast and Cablevision began offering films from IFC Entertainment via VOD the same day they are released in independent movie theaters.

— Jeff Baumgartner, Site Editor, Cable Digital News



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