Final Days for Your Neighborhood Video Store?

Video-on-demand (VOD) got another boost last week when Concurrent Computer Corporation and Scientific-Atlanta, Inc. announced that they have sealed their agreement to jointly develop and supply "full-function true VOD systems." The agreement finalizes a letter of intent announced in May and follows an April 1998 VOD agreement between Scientific-Atlanta and SeaChange International (profiled in a previous story).

As part of the new agreement, the companies plan to integrate Concurrent's MediaHawk video server with Scientific-Atlanta's interactive digital network, including the Explorer 2000 digital set-top box. According to Concurrent, each MediaHawk server is capable of up to 1000 simultaneous datastreams of MPEG-2 video. Each stream is completely independent and interactive; users can start, pause, rewind, and fast-scan forward and backward through each digital video stream independently. Concurrent claims the video streams are delivered with no degradation in performance or video quality, regardless of the number of digital video streams being simultaneously supported.

VOD is intended to give viewers instant access to a library of movies with VCR-like navigation controls (pause, rewind, fast-forward, etc.). Using VOD technology, cable companies intend to pursue the $17 billion video rental and sales business. With more than 75 million homes in America subscribing to cable television, 25 million of which pay for premium services, the cable industry reportedly plans to spend approximately $2 billion over the next five years to provide this capability.

"The days of going to the video-rental store and not having the movie you want available, and then being charged rewind fees and late charges, are now over," says E. Courtney Siegel, Concurrent's chairman, president, and CEO. "With this technology, consumers will be able to get the movie they want, when they want it, and in the comfort of their own living rooms."

According to Michael Harney, vice president and general manager of Scientific-Atlanta's Digital Subscriber Networks, "Now that we have finalized our joint-development agreement, we can move quickly to meet cable operators' demand for a cost-effective video-on-demand service. All of our interactive digital trials indicate that VOD is a killer application, and we're installing interactive digital systems in 1998 to make this service a reality."

Scientific-Atlanta reports that it has received purchase orders or commitments for its interactive digital network from 11 major cable operators in the US and Canada representing 10 million cable subscribers. These cable operators include Time Warner, TCI, Cox, Comcast, Adelphia, Marcus Cable, and Rogers. The company also claims that all these systems are capable of delivering video-on-demand with the addition of equipment in the cable operator's headend. All the boxes currently being deployed in these systems are capable of delivering VOD.

In addition to VOD, Scientific-Atlanta says the interactive digital network is designed to support e-mail, Web browsing, interactive games, and e-commerce.