VOD: Time-Shifting Primetime
Legal logjam breaks between cable and content companies
By David F. Carr -- Broadcasting & Cable, 5/18/2008 8:00:00 PM
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SEEKING A WIN-WIN SOLUTION
Video-on-demand (VOD) services such as Time Warner Cable's Start Over and Look Back services and Cox Communications' MyPrimetime are proving that the legal logjam over the technology is breaking, as more networks and TV series producers agree to allow on-demand access to their content.
Time Warner has agreements with more than 100 cable networks to capture their programming and serve it up on-demand, provided that playback of the commercials is also included. The most mature of these services, Start Over, allows viewers who tuned in late to a program (but before it is over) to effectively rewind and view it from the beginning. Time Warner captures a copy of the video content as it is broadcast and makes it available for on-demand viewing.
Cox's MyPrimetime is a little different, offering selected ABC programming such as Desperate Housewives and Grey's Anatomy and NBC shows such as 30 Rock and Friday Night Lights that become available a day after their broadcast; the shows are offered for about four weeks thereafter. Again, fast-forwarding through commercials is prohibited, helping resolve some of the legal and business challenges.
Both services are so far available only in a few markets, but they are expanding. Start Over was introduced in South Carolina in 2005 and is now available in eight markets, including Tampa, where it is offered by Brighthouse Networks through a technology partnership with Time Warner. Tests are underway in six more markets, and a rollout in Staten Island, N.Y., is scheduled for this summer. MyPrimetime was introduced in Orange County, Calif., in the fall, and now is also available to Cox customers in Connecticut and Rhode Island.
VOD initially came to market as an extension of the pay-per-view model mainly for access to movies. The technology has now advanced to the point where hundreds of channels worth of content can be captured within seconds of being broadcast and stored for playback, allowing the cable network to provide a “time shifting” service akin to the one consumers enjoy when they use a digital video recorder (DVR) to capture programming for viewing at a later time. And where using a DVR requires planning ahead, viewers can access time-shifted content more spontaneously by relying on the cable network to record the content for them.
But the legal framework for such services is still evolving. In fact, Time Warner has been on both sides of the issue of what programming cable operators can capture and how. As a major content owner, it was one of the firms that sued to block a “network DVR” service Cablevision wanted to offer, in which customers would have been able to order content recorded on and played back from cable company equipment, rather than on a device in their own home. Last March, a New York court sided with the content owners who argued that the cable company could not make such recordings without their consent.
SEEKING A WIN-WIN SOLUTION
The key to success with expanded on-demand applications is finding a win-win solution for all parties, says Bob Benya, senior VP for on-demand product management at Time Warner Cable. Of several concepts the company explored with networks and media partners, he says, “Start Over was the one that seemed to make sense for everybody.” The time-shifted video playback “is only available until the last frame of the live video is broadcast, and once it's over, it's over,” he adds. So participating networks were only taking a small step, in effect allowing their broadcasts to be delayed for minutes rather than hours or days.
Another key feature is that the Start Over option is one viewers can access from the context of the participating network's programming, rather than changing channels to access a separate menu. And once the delayed playback is over, the viewer is returned to that same network's real-time programming, reinforcing rather than detracting from loyalty to that network.
“We're supporting the TV industry, and at the same time creating something unique for our digital customers,” Benya says. “We don't have rights to every single channel or every single show, but we believe we're rapidly approaching critical mass.”
The new C3 Nielsen rating, which gives credit for programming viewed within three days of its original airing, is also helping break down resistance from networks and advertisers, according to Benya. With its Look Back service, Time Warner is now trying to negotiate for the right to retain content on its servers for playback over a longer period of time. “What we expect will happen is that many programmers will give us the rights to do Look Back within three days,” Benya says.
Time Warner has been offering Look Back in South Carolina for about six months and plans to start introducing it elsewhere in 2009, he says. The company is still evaluating the impact on its network and server capacity as it lays those plans. The Start Over service alone has proved to approximately double the peak load on the company's on-demand servers and network.
Both Time Warner and Cox report that offering on-demand access to network programming is a boon to customer satisfaction. Bob Nocera, director of marketing for new video services at Cox, reports that 20% of viewers surveyed who own a DVR said they found themselves using MyPrimetime as an alternative. And 25% of those who had viewed MyPrimetime programming said that if it hadn't been available through the service, “they wouldn't have watched the show at all,” Nocera says. “So that shows this has value for the viewers, as well as the networks.”
Given that, Nocera is optimistic that the content licensing obstacles to expanded video-on-demand applications are beginning to fade away. “As networks start to look at the benefits of on-demand, they will be keeping that in mind as they put these contracts together,” he says.
Where Time Warner's Start Over programming is replayed with the original commercials intact, the MyPrimetime shows are played with a different and “somewhat lighter” load of ads inserted into the video stream, Nocera says.
Time Warner is working with multiple video-on-demand technology vendors to support its Start Over service and has also developed proprietary systems to control the capture and playback of content. SeaChange International has announced a similar capability, which it calls ReStart TV, that it offers as part of its Axiom On Demand VOD platform. Like Start Over, ReStart TV will be capable of making video streams available for rebroadcast within seconds of the original airing.
It will be up to the cable companies that license the technology to figure out the corresponding content licensing details, but the product itself is capable of supporting services like Start Over and Look Back, says Alan Hoff, senior director of VOD solutions for SeaChange.
So far, Hoff has cable companies trying it in a lab setting. The product will be commercially available in June, and he expects the first deployments to customer homes by the end of the year.
“I can assure you that the reason this product exists is that SeaChange has been hearing great ardor from the operators for us to get this to market,” Hoff says.
Shahar Bar, director of on-demand solutions at Harmonic, a VOD vendor, says he is seeing more aggressive use of the technology overseas, where applications including network VOD have been deployed successfully. Still, he says, “I see the legal issues as temporary. They may take a year to resolve, they may take four years. In general, the technology is already there.”
Start Over proved that the legal issues can be overcome, he says, and emerging technologies for dynamically inserting advertisements into video-on-demand content will attract greater commercial interest. Harmonic is one of several vendors offering technology to alter the mix of ads inserted into a VOD program as it is shown.
Nocera says that's something Cox is testing now, but sees as a “Phase 2” technology for its MyPrimetime rollout: “Phase 3 will be targeting at the ZIP code level, and then eventually at the individual level.”
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