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Clear Server Space for HD VOD

Another programmer is joining the high-definition TV craze: In Demand plans to announce today (Feb. 10) that it will begin offering hit movies in HD on a video-on-demand basis.

First up is My Big Fat Greek Wedding, from HBO Enterprises, which debuts in April. The sleeper hit grossed $232 million at the box office.

DreamWorks SKG and New Line Cinema will also supply new VOD releases in HD. New Line is offering Knockaround Guys, while DreamWorks will proffer Road to Perdition
($104 million) and The Tuxedo
($50 million), all spring releases.

"This is a really great opportunity for consumers and for cable operators to re-establish themselves as offering the latest technology," executive vice president Rob Jacobson said. "It represents the perfect marriage of cable's most important initiatives [VOD and HD]. We want to keep making VOD better."

Jacobson said In Demand has talked to other studios about HD product, concurrent with VOD licensing talks. Although New Line and DreamWorks will dip their toes in the water, Jacobson said, "our expectation is we'll get many, if not all, [of] their titles in HD."

As to the other studios, Jacobson said, "we're having conversations with everyone. We're hopeful they will see the benefit and feel comfortable."

In Demand supplies its affiliates with hit movies from Artisan Entertainment, Metro-Goldwyn-Mayer Inc., Sony Pictures, Twentieth Century-Fox, Universal Studios and Warner Bros. Its largest cable affiliates are Time Warner Cable, Comcast Corp. and Cox Communications Inc.

The pay-per-view and VOD programmer said it delivers content to 5 million active VOD subscribers.

Costs and codes

HD on VOD doesn't come without some costs. Studios typically shoot movies in film or HD video. There is some cost to convert film to video, although the price tag isn't hefty, In Demand executives said.

In Demand must encode the same movies for transmission in both standard-definition and HD formats. Standard encoding costs from $6 to $8 per minute, said In Demand senior vice president, technology and operations John Vartanian. HD encoding will cost more than standard encoding, but the pricing isn't set yet, he said.

It takes about four times as long to transmit an HD movie to a cable headend, and high-definition content takes up four times as much space on a VOD server, Vartanian said.

In Demand will transmit VOD movies on Loral T7, transponder 3, and encode movies at at 14 Megabits per second. In Demand has begun testing HD integration with catchers from N2 Broadband, and will extend the integration process to cable's major server vendors, he said.

"There is some tweaking that needs to be done," said Vartanian.

HD movies also require more bandwidth for transmission inside the cable plant. A 256 Kilobits per second quadrature-amplitude modulation system can handle 10 standard-definition VOD signals or two HD and two standard signals, he said.

Since an HD movie takes up four times the streaming capacity and bandwidth as "regular" content, it's conceivable the premiere of a very popular movie could push current contention rates to their limit.

If that should happen, Vartanian said, "contention rates and traffic engineering will have to be revisited."

Although HD content takes up more server space, Jacobson said not every movie needs to be delivered and transmitted in HD. Still, an increasing amount of HD product on servers could ultimately force MSOs to expand capacity, which would be welcome news to VOD server vendors.

DVD-type sound

The movies also will be transmitted in Dolby Digital 5.1 audio, equivalent in quality to DVD, In Demand said.

"We want to try and get as much product available as we can, but we don't necessarily want to do all films in HD," Jacobson said.

In Demand also ships basic-cable network content to VOD platforms, which could represent another HD opportunity. The network also transmitted Turner Network Television's NBA All-Star weekend programming in HD.

Jacobson said In Demand affiliates that have launched HD and VOD in the same market plan to carry the new VOD HD content. Movie pricing will stay the same, typically $3.95 per title — at least initially.

There have been discussions about whether HD VOD movies could sell for a higher price, Jacobson said, but In Demand is preaching moderation "to see what the consumer response is."