ABI Research Sees Digital Cable VOD Hamstrung by Thin Content.

OYSTER BAY, N.Y. -- SeaChange, Concurrent and nCube were awarded Technical Emmys recently for their innovations in bringing video-on-demand products and services to cable subscribers. Their recognition is well-deserved, but another ingredient is needed to ensure cable's competitiveness.

With over 50% of US digital cable subscribers now enjoying access to VOD, a wide choice of content is still lacking, according to Vamsi Sistla, ABI Research's director of broadband and residential entertainment technologies.

"The focus for cable operators up to now has been to light up as many homes as possible with video on demand services," he observes. "The VOD services consumers are receiving are very rudimentary. I think the focus should now be on providing as much content as possible. CinemaNow and MovieLink are adding hundreds and hundreds of broadband customers on a monthly basis - a clear indication of the lack of attractive on-demand content through cable.

MSOs and content owners must take the VOD model to the next level of customization in order to reap the full benefits of this technology. MSOs have been spending more slowly than they should on VOD infrastructure and content partnerships if they're to take advantage of this opportunity.

If cable MSOs find it hard to invest additional CAPEX towards VOD infrastructure, Sistla suggests, they should aggressively start looking to content aggregators to provide a wider array of choices to their customers, before it's too late.

"The telcos will get their ducks in line," he says, "and once they do that, cable MSOs might find it much harder to keep their churn rate low. A full fledged VOD offering is one of their key weapons to keep the loyalty of their subscribers."

ABI Research's study "VOD and PVR" analyzes the present and future market and the technology and service trends for cable and telco video-on-demand (VOD), as well as for Personal Video Recorders (PVR).

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com, or by calling 516.624.2500.