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HD On-Demand Stuck in Slo-Mo

The apparently natural progression of high-definition programming to the video-on-demand (VOD) menu is challenged by two key inhibitors: capacity and content.

So, until advancing technologies like MPEG-4 and Switched Digital Video are firmly entrenched by cable operators, there will very little HD VOD content. And those HD upgrades to VOD are still moving at a painfully slow pace.

“VOD itself is going pretty well,” says Colin Dixon, practice manager for IP media at the Diffusion Group, a media- research company, “and I think we’ll see a slow, steady growth of HD content to VOD, led by sports and SVOD [subscription VOD] channels.”

Yet for cable operators, the HD-on-VOD model has growing appeal in their hard-fought battle with rival telcos and DBS.

“It’s a good tool for cable operators and a necessary progression,” says Ian Olgeirson, senior analyst for Kagan Research. “But there’s a trickle of HD content in VOD, and HD movies can draw people into VOD, which is a competitive edge for cable.”

The progress of HD on VOD is nudged along by a supporting cast of companies. They include VOD heavyweight Sea Change International, which provides digital video servers to the VOD market.

“HDTV viewers tend to be very good customers for HD on VOD,” says Yvette Kanouff, chief strategy officer for Sea Change. “But the downside is logical: HD and VOD are sucking up lots of bandwidth. Nevertheless,” she adds, “we’re a big proponent of HD on VOD.”

She believes the bandwidth issue “will fade away” and the technical road maps are in place for a relatively smooth ride to HD on VOD.

Content, however, is a more contentious sticking point. “We’d love to see significant amounts of interesting content in HD on VOD, but it’s not there,” Kanouff says. “We also need scalability, switched digital and resource management. But there are no reasons why operators shouldn’t be offering some HD content on VOD.”

Although some operators are adding to their HD content on VOD, others like SureWest—a triple-play provider in Sacramento, Calif., that is currently offering 17 HD channels—are moving toward HD on VOD.

“We are adding services like SVOD and going through the plant upgrades,” says Carl Murray, strategy technologies director for SureWest. “We want to launch HD on VOD, but first, we have to make our system MPEG-4–capable and add next-generation set-top boxes. That’s the future.”

And what about content? No way will the studios hand over valuable HD movies, says Diffusion Group’s Dixon: “I’d be very surprised if they make first-run movies available on VOD. It will be the four major broadcast networks that will lead the HD-content charge, and sports networks like ESPN.”