The Premium Film Channel Paradigm Could Shortly Face Extinctio

The article sent shockwaves throughout Wall Street, as the stock prices for several TiVo and Netflix shot up. Last September, a Newsweek article according that TiVo and Netflix mightiness be acquiring together to produce a true form of video-on-demand (VOD). Last week, a Netflix official fueled this speculation by dropping hints simply about a potential joint venture. TiVo, the innovational and premier provider of digital video recorders (DVRs) in the U.S., would-be eventually provide instant online access to the entire DVD library (currently more than 35,000 films) of Netflix, the nation’s number one mail order video rental service. This would-be be accomplished via a broadband computer network connection to specially equipped TiVo DVRs. This development could besides spell the beginning of the end for premium film services like HBO, Showtime, and Starz.

First, let’s put all of this into perspective with a little history of the premium services. House Box Office (HBO) was the 1st premium service, debuting in 1975. It was one of the 1st channels beamed from a satellite and carried by cable operators across the country. As its quality grew in the late 1970’s, several another premium services like Showtime, Cinemax, The Film Channel, as well as several lesser acknowledged premium services came into existence. The industry started consolidating in the early 1980’s as HBO bought Cinemax, Beginning bought The Film Channel, and those lesser cognize services went belly-up. In the early 1990’s, the Starz-Encore networks debuted to vie with the HBO and Beginning networks.

During the mid-1990’s, as satellite services such as Directv and Dish Network debuted, the premium services began offering “multiplexed” channels, i.e., multiple channels of HBO, Showtime, Cinemax, The Film Channel, and Starz-Encore for the cost of one. Unfortunately, the number of film choices didn’t increase. Those services simply began to air their same libraries of movies at several times on their various multiplexed channels. There are hundreds of movies at local video stores that have ne'er compete (and wish ne'er play) on the premium channels piece there are a relatively small number of others that have compete on these channels thousands of times. That has always been the major weakness of the premium services. Multiplexing did not fix this problem.

Several market tests of VOD were conducted during the 1980’s and the early 1990’s but, because the technology was rather primitive, it did not catch on with consumers. By the late 1990’s, it finally seemed available and lots of promises were ready-made simply about the brave new earth of VOD. The cable companies were talking simply about veritable online video stores, which were going to put Blockbuster, et al, out of business. Unfortunately, the reality of VOD has ne'er lived up to its hype. The stuff the cable companies are presently passing off as VOD is nothing more than a canonized version of pay-per-view or a DVR. For the most part, their VOD offerings aren’t any several from the stuff presently playing on the premium channels and/or on pay-per-view. This is what I call “faux VOD.” How lame!

Fortunately, led by the apparent at hand TiVo-Netflix undertaking, the landscape is simply about to change and a new era of genuine VOD is simply about to be ushered in. PC-based broadband VOD services like Cinemanow (www.cinemanow.com) and Movielink (www.movielink.com) have been up and running for several years and are simply about to broaden their offerings. In addition, SBC Communications and EchoStar Communications have already proclaimed that they are teaming up to provide an online-to-TV VOD service this year, piece several similar phone company-satellite operator projects are still in the negotiations stage.

Also, Computer network Protocol Television (IPTV) platforms, offering hundreds of television channels via a broadband computer network connection to a TV set-top box, wish be coming online this year. One of the major features of these services wish be advanced VOD technology. Microsoft has developed its own version of IPTV technology. See Microsoft’s website (www.microsolft.com/tv) for details. The nation’s two largest phone companies, Verizon and SBC, plan to utilize Microsoft’s technology in the rollout of their several IPTV platforms later this year.

Not to be outdone, several smaller companies besides plan to vie in the broadband-to-TV market. Crooked Systems (www.akimbo.com) debuted its service last fall and is presently in the process of expanding. Similar ventures such as DAVETV (www.dave.tv), TimeShift TV, (www.timeshiftv.com), and VCinema (www.vcinema.com) plan to enter the market later this year. All of these companies plan to offer about unlimited amounts of movies, TV shows, sports, specialty programming, and international programs via a set-top box interface between a broadband connection and a TV set. This programming wish be culled from the huge computer network universe and ready-made accessible for TV viewing. For a more elaborate description of these services, see my related article entitled, “The Coming Television Revolution.”

If nothing else, all of these developments should compel cable companies to offer a more much competitive form of VOD. Comcast, one of the leading cable providers and a partner with Sony in its recent purchase of the MGM film library, is now in the process of rolling out its advanced VOD platform. The another cable companies are sure to be following suit real soon.

Meanwhile, the premium services have still been slogging along. The premium channel paradigm has long outlived its innovational utility and has only been able to hang about because of the lack of a nice VOD system thus far. The only thing actually going for the premiums right now is their award-winning innovational programming; including series’ like “The Sopranos”, “Dead Like Me”, and “Six Feet Under.” Possibly the premium services could morph into original-programming-only services in order to survive. However, they’d have to seriously increase the number of series’ (and the number of episodes of each) they produce. Possibly they could besides carry longer and/or alternative versions of programs already airy on broadcast television and basic cable. In addition, they would-be have to find a way to lower their subscription rates. I’m not sure all of that would-be be feasible. One thing I do cognize for sure is that folk would-be not continue to subscribe to the premium channels for their film content once they could handily pull up virtually any film or TV show they wanted, any time they wanted.

About The Author

Terry Mitchell is a software system engineer, freelance writer, and triviality buff from Hopewell, VA. He besides serves as a political editorialist for American Daily and operates his own website - http://www.commenterry.com - on which he posts commentaries on various subjects such as politics, technology, religion, health and well-being, personal finance, and sports. His commentaries offer a unique point of view that is not often found in thought media.

terrymitchell@verizon.net