Market sees 50% increase in overall orders to 550,000
Comcast says video-on-demand usage on its Philadelphia digital platform has skyrocketed since the addition of HBO and Cinemax on Demand to its VOD service two weeks ago.
In Philadelphia, where 1.9 million subs have access to the On Demand service, there was a 50% increase in overall orders to 550,000. Comcast sources say HBO already is accounting for half of all viewers, with original series like “Carnivale” and “Sex and the City” dominating consumer requests. Only three of the top 20 orders were actually feature films on HBO’s two subscription on demand services.
Andy Addis, Comcast Cable’s senior VP of marketing and new products, said the addition of all-you-can-eat subscription VOD services such as HBO and Showtime on Demand have significantly reduced digital cable churn rates as well as pay service churn rates.
Before the launch of HBO, Addis said, overall order rates were hovering at about five titles a month per enabled set-top box. On average, 35%-40% of enabled homes had ordered up an SVOD title, meaning that homes that actually use the SVOD service order up 12-14 titles per month.
The U.S. cable giant, which on Wednesday formally launched the HBO and Cinemax packages, is hoping VOD is the ace up its sleeve in the face of aggressive competition from satellite and slowing subscriber growth.
Available in East
The offer is now available to several million customers in Comcast’s VOD-enabled franchises in New England, Baltimore, Philadelphia, Washington, D.C., and Detroit. Package, which joins previously agreed carriage deals with Showtime and other SVOD packages, will also be included in the digital sub package in new markets as the Comcast on Demand service is made available.
Under Comcast’s setup, digital subs pay no additional charge for the subscription video on demand channels, which rotate a platter of current series and feature films for subscribers to view on an unlimited, on-demand basis with full VCR-type functionality to pause, rewind and fast-forward via remote. New content is added on a weekly basis, including the full series of hit shows like “Sex and the City,” “The Sopranos” and “Six Feet Under” in the run-up to new season launches.
Comcast expects to make VOD available to 80% of its 22 million home footprint by the end of 2004.
In addition to the HBO platter, for which the Time Warner-owned pay op said it receives an incremental revenue stream on top of its carriage agreement for the pack of HBO multiplex digital channels, Comcast also offers on-demand content from A&E, CNN, Comedy Central, HGTV and Food Network. Unlike the offerings on some other cable ops, these SVOD tiers are available to digital subscribers at no additional monthly charge.
Will add Starz! package
The cabler is expected to add Starz Encore’s SVOD package to its service by the end of the year.
Comcast is counting on fast rollout of its video-on-demand offerings along with combo set-top box/digital video recorders and high-definition packages to keep digital subscriber growth rolling along and ward off heavy competish from DBS providers DirecTV and EchoStar. Comcast is expected to add another 255,000 digital subs when it announces its third-quarter financial results Oct. 30, though analysts have warned that video sub growth could slow next year.
Securing Comcast was important for HBO, which says it now has carriage agreements for its SVOD offerings with all major MSOs except Cox. To date, however, the two HBO on Demand services have rolled out to only 50 cable systems nationwide (40 of which are Time Warner Cable systems) with just over 1 million subs.
Operators offer a variety of different pricing schemes for the Showtime, HBO and Starz! SVOD packages, ranging from Cablevision’s a la carte $4.95 per month to Comcast’s preference for a “no additional charge” all inclusive digital fee.