In Demand

Cable TV providers in the Baltimore region vie fiercely for customers with an increasing range of on-demand features

March 04, 2007|By Stacey Hirsh | Stacey Hirsh,Sun Reporter

Baltimore-area cable companies are promising much more than movies and TV shows these days. Viewers can sing karaoke, look for fugitives and get tips for cutting college costs - all as part of an explosion in on-demand programming.

Comcast Corp. has in recent months launched its Scholarships On Demand programming to tell students and their parents about available local scholarships, Fugitive Files On Demand to give viewers access to police photos and descriptions of accused criminals on the run, and Troop Greetings On Demand, which allows families of service personnel to watch video greetings from their loved ones. That's in addition to its more traditional on-demand programming.

Verizon Communications Inc. stands ready to compete, with its FiOS TV customers having access to a library of thousands of on-demand titles from movies to talk shows to children's programs, as well as offerings such as karaoke and CNET consumer electronics product reviews.

FOR THE RECORD - An article in Sunday's editions erroneously reported that Comcast would not offer analog cable service after February 2009. The company will continue to offer analog cable service; over-the-air broadcasters will be required to use only digital transmissions and analog television sets will need a converter box to receive over-the-air signals.
The Sun regrets the error.

On-demand programming has not only changed how consumers watch television - what they want when they want - it has changed competitive strategies as cable providers and phone companies invade each others' traditional turf.

"You need to have some kind of video capture, a way for someone to add convenience to broadcast," said Andrew M. Schroepfer, president of Tier 1 Research, a Minneapolis research firm that focuses on technology and the Internet.

"The mega-trend that continues to happen is, it used to be up to the content owners to tell us when we could watch shows, and now that has changed," Schroepfer said.

Indeed, on-demand programming has become so popular that even as competitors battle fiercely for customers, they all agree on its necessity - though some analysts believe the technology could be someday eclipsed.

"I think it's an absolute must," said Tricia Lynch, director of FiOS TV programming for Verizon.

"Consumers are looking at keeping up with popular culture, but on their own time. ... Having [video on demand] allows you to keep up with your favorite series or catch up with the series that everyone's talking about," Lynch said.

TV revolution

"It's totally revolutionized the way that people are watching television," agreed Michael A. Doyle, president of Comcast's eastern division. "People don't even know what night their favorite show is on anymore because they're either watching it on demand or they're DVR-ing it."

Video on demand and subscriber video on demand (for subscription channels such as HBO) was estimated to be a $1.15 billion market last year, up from $800 million in 2005, according to the consulting and research firm the Convergence Consulting Group.

The market is expected to reach $1.6 billion in 2007.

In Comcast's eastern division - which includes Maryland, New Jersey, Pennsylvania, Delaware, Washington, Virginia and North Carolina - more than 60 percent of homes the company serves have a digital box that gives them access to Comcast's on-demand library.

Doyle said that number continues to grow, and nearly all new customers are digital subscribers.

In the Baltimore area, 80 percent of Comcast customers have used video on demand in the past 90 days, with the average user accessing 18 programs a month, according to the company.

Comcast has about 8,000 titles available, most of them free. That number can be higher as the cable company adds and drops programs over the course of each month.

In January, for instance, Comcast digital subscribers in the Baltimore market had access to nearly 10,000 on-demand titles, the company said.

"We want to drive heavy usage to On Demand and basically change the way people watch television. That's why 95 percent of our content is free. That's why 95 percent of our content will remain free," Doyle said.

Eric Bonardi and his wife, Elizabeth, turn to Comcast On Demand about three or four times a week to watch newly released movies, use exercise programs or catch up on HBO series. On Sunday nights, for instance, Eric Bonardi usually has to work from home, so the couple watches Rome - the HBO series that airs Sundays at 9 p.m. - together Monday nights on demand.

"All of the different HBO series, we love to be able to catch up on them," Bonardi said, adding that the couple also uses Comcast On Demand "to bring us up to date before a new season."

Significant revenue

Launched in 2002, Comcast On Demand has grown into a significant contributor to revenue. Comcast added 1.9 million digital cable subscribers last year, up 59 percent from a year earlier.

The company's pay-per-view revenue hit $633 million in 2006, up 27 percent from 2005. Comcast's total 2006 revenue was $7 billion.

"Customers like it, so really, beside the additional revenue, it's delivering a service that the customers want, and that allows them to keep their customers at the current rates that they're charging," said Kent Custer, a cable and telecom analyst for A.G. Edwards & Sons Inc. in St. Louis.

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