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Comcast Hits 'Play' Button on Digital Video Service 'On Demand' in Connecticut

Posted on: Thursday, 26 February 2004, 06:00 CST

Feb. 27--Comcast Corp., the state's largest cable television provider, is rolling out a new digital video service that combines instant access to a variety of programming with VCR-like controls for rewinding, pausing and fast-forwarding.

The service, which Comcast calls "On Demand," is available in 47 Connecticut towns and should be available in all 59 communities served by Comcast by the end of next week.

Available to Comcast's digital cable subscribers, the On Demand service allows users to choose from 1,000 hours of movies, children's shows, sports, information and entertainment programming at the touch of a button.

About 70 percent of the programming can be viewed without charge; the remainder is reserved for premium channel subscribers or offered on a pay-per-view basis at prices ranging from $2.95 to $3.95.

"With On Demand, Comcast customers will have the ability to watch what they want -- whether it be hit movies, children's shows, a variety of cable favorites, sports or news -- whenever they want," said Tony Speller, area vice president of Comcast Connecticut. "It's TV on your terms."

Comcast digital-cable subscribers in the Hartford area, generally the territory once served by AT&T Broadband, can find the On Demand service on Channel 1. Comcast customers in the southern part of the state can find it on Channel 199.

With 21 million subscribers in the United States, Philadelphia-based Comcast is the nation's largest cable television provider. The company, which also owns sports teams, the Golf Channel, the Outdoor Life Network and other programming outlets, made headlines recently when it offered to buy the Walt Disney Co. for $56 billion.

Comcast serves about 450,000 customers in Connecticut. The company declined to say how many are digital cable subscribers, but one estimate puts the company's overall percentage at about one-third of its total subscribers nationwide. In addition to the On Demand service, Comcast's digital cable package offers about 20 more TV channels than its so-called standard cable service, and about 45 music channels.

The Connecticut debut of On Demand is part of Comcast's nationwide rollout of video-on-demand -- a service that cable executives have dreamed of offering for years.

Earlier this month, Comcast reported that On Demand was available to about half of its subscriber base, and that the service "has had a significant impact on how customers view television." In Philadelphia, where On Demand was introduced, about half the customers use the service an average of 15 times a month, Comcast said. It forecast that 80 percent of its digital subscribers would have access to On Demand by the end of 2004.

Industry experts said video-on-demand gives cable companies an opportunity to boost revenue and fend off the defection of customers to rival satellite TV providers.

"It's a huge initiative for the cable industry. They absolutely have to have new products," said Michael Goodman, a cable television analyst for the Yankee Group, a market research and consulting company. "If you're going to grow your revenues, you've got to get more money for new products and services."

Comcast officials said they hoped On Demand would encourage subscribers to upgrade to digital cable, a premium level of service costing about $10 a month more than the regular "extended basic" package. And they also said they expect the added convenience of being able to pause, fast forward, rewind and even temporarily save programs will encourage greater viewing of paid movies.

Goodman said video-on-demand also offers cable companies such as Comcast a competitive edge over satellite providers, such as DirecTV and the DISH Network, which cannot offer two-way interactivity as easily.

He said cable companies nationwide have invested $60 billion to upgrade their networks for advanced services in recent years, and are now using that infrastructure to deploy video-on-demand, digital telephone, high-speed Internet access and other services.

Finding competitive advantages has become increasingly important to cable companies, which have seen their share of the consumer market stall, and even decline in some cases, as consumers have turned to satellite providers.

For consumers, video-on-demand services offer some freedom from the vagaries of TV programming schedules along with the viewing controls normally associated with VCRs and digital video recorders such as TiVO. A library of about 100 movies gives consumers an alternative to rentals of videotapes and DVDs. Pricing is comparable to conventional cable pay-per-view movies, but customers can have access to the movie for a full 24 hours.

Comcast said it expects to rotate its archive of programming regularly, bringing in new titles and retiring older programs. The size of the archive should grow as consumers get more experience with the On Demand service, the company said.

"A lot of programmers are inquiring about this," Speller said. "We expect the content to grow and grow. This is really the start."

But Richard Doherty, a cable analyst for the Envisioneering Group, a Long Island consulting firm, said programming choices are likely to remain somewhat limited while the movie and television industries work out licensing and revenue issues related to video-on-demand programming.

The movie industry, for example, likes the idea of distributing its content electronically, but wants to be careful not to upset established revenue streams from videotape and DVD rentals, Doherty said.

Comcast isn't the first to offer video-on-demand in Connecticut. Cablevision, the state's second-largest provider, said it introduced a similar service it calls "Interactive Optimum" or "iO," in 2002. Cox Communications, the state's third-largest cable provider, expects to introduce its own video-on-demand service, which it calls "Entertainment on Demand," in June, a spokeswoman said.

Brian Ferney, Comcast marketing manager, said the company eventually hopes to offer programming via On Demand that can't be found through other outlets.

Travel programs targeted specifically for New Englanders might be one example, he said. Cooking programs on how to prepare a regional specialty might be another.

Comcast is also preparing to offer a new digital video recorder as part of its cable box to enable consumers to record both On Demand programming and conventional television shows for later viewing.

The so-called DVR product is expected to be available throughout the Comcast territory by the end of 2004.

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(c) 2004, The Hartford Courant, Conn. Distributed by Knight Ridder/Tribune Business News.

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