There’s a rapidly developing option for TV audiences hungry for a wider range of content: download-on-demand. Thanks to recent deals involving upstart video-download service Akimbo and TiVo, subscribers can download everything from baseball games to cooking programs over a broadband pipe and into a digital video recorder hooked up to the TV.
Last week, Major League Baseball Web site MLB.com announced that it will deliver highlights and condensed games to subscribers’ televisions via Akimbo’s DVR system. And TiVo has tapped three IFC original series (Greg the Bunny, Hopeless Pictures and The Festival) for the trial of its new service, which allows viewers to download content over the Internet and save it to a DVR for viewing on a TV. Download times aren’t exactly VOD-quick: 3- to 5-megabit-per-second (Mbps) connections can download an hour-long program in about an hour.
“Our download service isn’t about instant gratification like regular VOD,” says TiVo Senior Product Manager Evan Young. “This is similar to setting up a season pass or wish list, in that you set it up and forget it until the content is actually available for viewing.”
The deals hint at what could be an important complement to cable operators’ get-it-now VOD services. One of the daunting issues operators face is, as VOD grows in popularity, they need to add more streams to handle increased content. And while a VOD library with 100,000 hours of content sounds like a great way to keep subscribers using the service, it’s costly—especially when 100,000 hours is replicated across hundreds, if not thousands, of systems.
But, for Young, it’s more than distribution or storage. “We see this as a complementary service for our subscribers and also for program producers and networks,” he says. “This gives programmers who are concerned their show will be lost in the 500-channel universe a chance to draw attention to it.”
IFC General Manager Evan Shapiro concurs: “This is more of a promotional effort. This is about reaching viewers and having them tell others to get season passes for IFC shows.”
Download-on-demand could save cable operators millions of dollars, believes Akimbo CEO Josh Goldman. They could use their VOD servers to distribute popular content, while using their broadband pipe to deliver a download system that can access content that appeals to a smaller group of subscribers. “With the cost of Internet transport falling and the codecs that compress the content improving,” he says, “this is ultimately a good thing for cable operators and networks because we can offer a vast amount of content.”
But not everyone’s convinced what role download-on-demand will serve. Adi Kishore, media and entertainment strategies analyst, The Yankee Group, says it isn’t so much a threat to cable’s linear channel offerings as download-on-demand is to advanced services like VOD. He says if cable operators charge $15 a month for VOD access and other services, customers could find less expensive online delivery services more compelling.
Yet he finds the concept intriguing nonetheless. “The prospect of unlimited video online and the ability to watch it on TV rather than the PC is attractive,” he says. “And while most content so far has been very niche oriented, the MLB deal raises eyebrows because there is nothing niche about baseball’s appeal.”
Another significant aspect of download-on-demand is that, as program producers and studios begin to store their archives as digital files, it becomes possible for download services like TiVo’s or Akimbo’s to tap into that archive server. “The amount of content we could offer is limitless,” says Young. “It can be hosted anywhere.”
IFC’s trial runs through October, and Shapiro expects IFC to learn lessons that it can apply to its launch of regular VOD services in 2006. Downloading on demand, coupled with the more mature VOD, is further proof that the network model is changing, he says: “In an era when PVRs [personal video recorders] are rolling out quickly, the linear-network model becomes very quaint.”
Akimbo, meanwhile, continues to expand its library and now has more than 4,000 titles available via download from networks like CNN, Food Network and BBC. It’s adding 1,000 each month and just added baseball to the mix. Akimbo delivers content over broadband to boxes that hold 150 hours of content and cost subscribers around $199. Users also pay $9.99 a month for access to both free and pay-per-view content. MLB.com pricing is still to be determined.
Business-model flexibility is one of the reasons Akimbo’s Goldman believes the service will continue to gain traction with content owners. “We have a revenue-share agreement and take care of the hosting, selling and delivering of content for our partners,” he says.
The deal is about more than just exposure and new revenue, he adds. It’s about providing a mutually beneficial service to content owners. “For MLB.com to do this themselves, they would have to create a different user interface for every type of set-top box and set-top–box software available,” says Goldman. “But we’ll encode the video, fix the metadata, and aggregate it behind a user interface that can work with the cable operator’s systems.”
While downloading old ballgames and episodes of Emeril is all well and good, everyone has an eye on the bigger prize: targeted advertising. “Targeted ads will allow us to make more [content] available for lower cost or even free,” Goldman says. “Once the advertising world comes to grips with VOD and digital delivery, we’ll move from a 30-second spot to something that is more targeted.”
