Video services

DVD Direct

Cablevision Systems Corp. (NYSE: CVC) is once again thinking outside the box... the cable box, that is.

Although its ambitious RS-DVR (Remote Storage-DVR) project remains in a holding pattern pending the outcome of its court appeal, the MSO was flying high again Monday after announcing a deal that will allow customers to buy movies via VOD and purchase the physical DVD, as well.

In addition to tightening availability windows, the deal, with Popcorn Home Entertainment , will try to spur VOD usage and perhaps beef up the video revenue stream. Plus, it's a service that FiOS doesn't offer yet, so there's some competitive differentiation to consider too.

Coming quarters will tell us whether this strategy will have any effect on the bottom line, but credit Cablevision for having the necessary vision to offer a service that not only allows it to tap into the lucrative DVD ecosystem, but to do so using its entire base of already-deployed set-tops.

The concept of offering physical DVDs is not new to cable, but the Cablevision-Popcorn execution of it is.

It wasn't that long ago (2006) that Scientific Atlanta was showing off "Direct to Disc," a proof-of-concept that showed how a cable set-top, combined with a DVR, DVD burner, and a high-speed Docsis connection, could perform something similar. The idea: Download the movie to the hard drive and, for a price, allow the customer to write it to a DVD.

It's an interesting concept (we asked, but haven't heard back from the SA camp yet about whether there's a real Direct to Disc product coming), but the service would be limited to the few consumers who happened to have the right set-top combo. Of course, MSOs might also try a service that allows customers to download a movie to the PC and do the DVD writing right there, digital rights management and business deal hassles notwithstanding. Comcast Corp. (Nasdaq: CMCSA, CMCSK) chief Brian Roberts demonstrated the movie download concept (sans the physical DVD element) at last month's Consumer Electronics Show. (See CES: Roberts Declares Open Season.)

But Cablevison's approach with Popcorn is interesting in that it gives consumers the ability to watch the film right away (via VOD from any digital set-top connected to the network) and obtain a physical copy for their personal library through the mail... with just a few clicks of the remote.

But, for now, Popcorn Home Entertainment is limited by a relatively small library. Its "Now Playing" section lists fewer than 20 movie titles.

But getting Cablevision on board is a good start, and could serve as a springboard for more studio deals for Popcorn. It might also give other MSOs reason to follow suit, giving them their first taste of DVD distribution revenues and a line of business that complements their VOD strategies.

— Jeff Baumgartner, Site Editor, Cable Digital News

Interested in learning more on this topic? Then come to Docsis 3.0 Strategies: From Product Development to Service Deployment, a conference that will take a comprehensive look at the cable industry's plans to roll out its next-generation architecture around the world. To be staged in Denver, March 19, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.

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