To:  IMCC Members

 

 Re.:  Video on Demand

 

VOD is much talked about and may have a future application for PCOs in MDUs.  First, providers and MDU users must learn what it is, how it works and whether it has a realistic business model.

 

At the IMCC Conference in May we had a session on VOD.  There also is a primer on the web site.  Attached is another useful educational piece.  It was prepared by Edward Villars from Capanis Networks.  His contact information is at the end of the piece.  He will continue to keep us informed.

 

Here are some personal observations:

--VOD is being rolled out only by the largest of MSOs.

--Many folks question if they are really making money on it or simply using technology they spent mega-bucks to install and now must utilize it somehow.

--The take rate for VOD is very low, there is little evidence that residents are demanding it and it has not proven very sticky.

--It may be needed/profitable in the hospitality market, but that is not the MDU market.

--At least based on today's technology, VOD requires a significant capital investment.

--It is not easy to find an adequate supply of content.

--Providing VOD consumes a large amount of spectrum/channel capacity.

--Promotion of the product requires expenditures, and the billing systems are not simple.

--NVOD and use of multi-plexing may be a realistic alternative, at least in the foreseeable future. Also, the DVR can achieve much of what VOD provides.

--It is also suggested that Internet delivery of video and voice will over take VOD and that real PCO revenue can be generated by providing bandwith the MDUs want their residents to use for several purposes.

 Your comments/observations are welcome.

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