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Cox Gets ABC VOD

Cox Communications Inc. broke new ground this week by inking a deal with ABC to become to first MSO to offer hit prime-time broadcast shows from the network via “free” VOD.

The deal was enabled by a treaty between ABC and its 200-plus local affiliate stations to lift "repurposing restrictions" on network TV programs. ABC agreed to offer local stations the opportunity to sell and insert one commercial for VOD-enabled shows, while the national network will get four or more ad slots. The kicker is that ABC shows will only be offered via cable as "fast-forwarding disabled VOD" offerings to ensure the commercials are actually seen.

While DVR-savvy digital cable customers will miss using the skip button on their remotes, they will appreciate being able to see "Lost" and "Desperate Housewives" after forgetting to record them on their local set-top hard drives. It's similar to the "Start Over" model Time Warner Cable Inc. (NYSE: TWC) pioneered and Comcast Corp. (Nasdaq: CMCSA, CMCSK) is planning to adopt. (See Comcast Feels Like Starting Over and TWC 'Starts Over' in HD .)

The ABC-Cox deal follows a trial the companies have been running in Orange County, Calif., for several months. ABC and Cox said their research found that nine out of 10 users said they didn't mind disabled fast-forwarding to access the shows for free, but only 20 percent of users with DVRs opted to watch the ABC via VOD.

Which other MSOs and broadcasters will get on the fast-forward-free VOD bandwagon?

According to Nielsen, 20 percent of U.S. homes had DVRs at the end of 2007. If the networks get off the dime, maybe they can convince the other 80 percent to go with VOD instead.

– Michael Harris, Chief Analyst, Cable Digital News

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