DirecTV will become the first multichannel video provider to launch a video-on-demand service from a group of four Hollywood studios that will offer films two months removed from their theatrical debut for a $30 rental fee. Warner Bros., Sony, Universal and 20th Century Fox will introduce the service initially on DirecTV exclusively, followed by limited runs with cable providers in certain markets. The service is aimed at adults who prefer to watch new films at home rather than rush out to the theaters after film releases.
DirecTV will begin offering a video-on-demand service in the second quarter that pipes shows and movies to subscribers' DVRs via their broadband connection. But one analyst fears that the system may not be sufficiently sophisticated: "They are just trying to push people with whatever blunt instrument they have to connect their set-top boxes to the Internet and become broadband-connected customers," said Forrester Research's James McQuivey. "Without that, they are dead in the water."
DirecTV Group plans to offer two VOD services: one delivered by satellite and a second delivered over high-speed Internet connections. The broadband VOD service will use the new HD versions of DirecTV set-top boxes with DVRs, which will be available later this year.
FX is seeking exclusive sponsors for the series it plans to offer through VOD on DirecTV. The sponsorships would offer a source of revenue in addition to the $2.99 per episode that viewers will be charged.
A tiny telco in Utah, All West Communications, is offering video-on-demand to its customers via a Next Level Communications very high-speed DSL. Next Level says it sees the launch as an important first step in demonstrating the commercial viability of its Full Service Access Platform.