Starz Entertainment used to be a portable media wannabe. But not anymore.
For the past five months, Starz has been trying out an online video-on-demand (VOD) service for broadband fans and people on the go. Known as Vongo, the premium service offers more than 1,600 movies and videos and a live, streaming Starz TV channel to subscribers for $9.99 a month. It also serves up select titles on a pay-per-view basis.
The tests have gone well, leading Starz to conclude the beta phase two weeks ago and declare its baby ready for prime time. Starz also signed a marketing deal with Hewlett-Packard to promote the service on H-P and Compaq notebook PCs, as well as a DSL distribution pact with AT&T. And it upgraded its encoding rate from 700 kbit/s to 1.3 Mbit/s to boost its picture quality for TV viewing.
But Vongo, while available for downloading by computer and laptop users, still didn't have a portable media partner to play with. Although three consumer electronics manufacturers spelled out plans to launch compatible media players when Starz unveiled Vongo at the Consumer Electronics Show (CES) in January, none of them came through over the winter and spring. LG Electronics withdrew from the market before even entering it while another smaller gadget maker, Tatung, hasn't been heard from since. And forget about portable media king Apple Computer, which never came close to a deal with Starz.
So imagine the relief in Starz' Englewood, CO headquarters when the third CE manufacturer from the CES briefing, Toshiba America, came to the cable programmer's rescue earlier today. In a big, splashy press conference, Toshiba announced the debut of two new "gigabeat" Portable Media Center products, one with 30 GB capacity and the other with 60 GB capacity. Both products, soon to be available in stores near you, have been officially anointed "certified" media players for the Vongo service.
Now that this big hurdle has been mounted, though, at least one more large obstacle remains for the Starz team. They still must notch a distribution deal with a key MSO to establish credibility with leery cable operators, who are clearly concerned about broadband TV services like Vongo cannibalizing their core video customers.
Starz executives say snaring cable affiliates for their new broadband service remains a priority for them. But, as evidenced by their DSL deal with AT&T, they insist that they won't let the cable industry's opposition stand in their way.
'We certainly view all our affiliates as very important,' says Bob Greene, senior vice president of advanced services for Starz. 'We want them as customers. But we're not going to wait for that to occur. We'll go directly to consumers as long as that's the only option.'