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Tivo-Netflix Deal Highlights Potential of PVR-VOD

Because of the capacity of their broadband pipes and their existing connection to the TV, cable operators like to say only they can effectively deliver the video-on-demand (VOD) programming couch potatoes will increasingly desire. Hogwash. Yes, cable's network is superior for the delivery of dedicated video streams, whether in standard or high-definition format. However, with a large personal video recorder (PVR) hard drive, VOD could also be delivered effectively through an IP 'trickle stream' over virtually any broadband connection: DSL, satellite, broadcast spectrum or even cable modems. The customer doesn't care which provider has a better network infrastructure. They simply want to be able to choose from an attractive library of on-demand content with the ability to pause, rewind and fast forward. Unless cable gets creative, from the point of view of the subscriber holding the remote control, the on-demand service offerings could appear comparable. Yesterday, PVR player Tivo and DVD rental service Netflix announced a joint development agreement to develop such VOD-PVR offering, both technologically, and by working with Hollywood studios to secure content. These companies ultimately may or may not be the ones who make this concept fly, but someone will. Could be Tivo, Netflix, SBC, Verizon, DirecTV, EchoStar or Disney. In any case, cable operators should be very concerned. Just as MSOs are moving aggressively to skim the cream off of the telephone business with VoIP, a host of other players have their sights set on doing the same for video.
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