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Time Warner Opens Virtual Video Store

Time Warner Cable began stocking a virtual video store in Greensboro, N.C., last Friday and could begin rolling out a “chain of outlets” next year.

Working with In Demand Networks, Time Warner Cable on Friday introduced More Movies on Demand in Greensboro. The service could house close to 2,000 titles by the middle of next year, and the nation's No. 2 cable operator has its eye on outfitting a number of other systems with the expanded library of movies available on request throughout 2007.

With thousands of instantly available titles, Time Warner Cable could compete more closely with traditional video outlets such as Blockbuster Entertainment and pull away customers from satellite services, which do not provide on-demand services. But it still falls short of the breadth of selection of Netflix, the mail-delivery movie service.

In Demand senior vice president of programming David Asch said that other cable affiliates will likely open their own virtual video stores as well, beginning in the first half of 2007.

Supplementing the 200 or so recent movie releases the cable operator typically offers to its subscribers on-demand, the More Movies on Demand program added 400 titles in its “Family Movies” and “Classic Movies” categories last Friday, according to Time Warner Cable senior vice president of on-demand and interactive TV Bob Benya. Whereas current releases cost $3.95 per film, most of the additional titles will be priced at $1.95, with special themed movies going for 99 cents as a means to stimulate impulse sales.

Beginning in February, Time Warner Greensboro will add approximately 200 more library titles per month through June, opening up new channel designations like drama, comedy or action. In the process, the operator's movies-on-demand inventory will climb at that stage to somewhere between 1,800 and 1,900 films, Benya said.

“This is ultimately the vision the industry had for pay-per-view 10 years ago, to have a video store at its fingertips that it could offer to subscribers,” Leichtman Research Group principal Bruce Leichtman said. “With 2,000 titles, there is for all intents and purposes virtual parity with the bigger chains, and Time Warner would have more movies than many of the smaller video chains and independents.”

Asch distanced More Movies on Demand from comparisons with Netflix, which conceptually has “no limits” to the number of titles it can offer, because it doesn't have to concern itself with file-storage issues.

Time Warner doesn't figure to be alone in this. Asch said In Demand has “spoken with several other operators” about helping them open their own versions of virtual video stores.

Asch said In Demand had garnered the additional titles from such studios as Universal Studios, Paramount Pictures, 20th Century Fox, Metro-Goldwyn-Mayer and Lionsgate.

While Leichtman believes More Movies on Demand holds significant promise for cable, it's not a panacea.

“The long tail here gives you a video store and that sounds good, but [cable] is still at disadvantage” in terms of timing, he said. “Fifty percent or more of the video business comes from new releases,” he said.