ANAHEIM, California -- For 10 years, the running joke about video on demand over TV sets has been that it's the technology of the future -- and always will be. Countless, expensive trials of the technology failed to blossom into a market.
That market now appears to be imminent. Dozens of companies at this year's Western Cable Show -- most compellingly, set-top box leader Motorola -- are demonstrating network-based products that allow consumers to instantly call up movies and TV programs, pause and fast-forward them, and perform other tricks previously relegated to VCRs and TiVo devices.
More importantly, these companies say they are preparing to roll out the technology to millions of consumers.
Bernadette Vernon, a strategic marketing executive in Motorola's Broadband Communications division, predicts the number of people subscribing to video-on-demand services will swell from perhaps 1 million to 10 million by the end of 2002, ranking it as one of fastest-adopted consumer technologies of all time.
Video on demand "is being deployed, customers like it and (cable operators) are making money on it," she said. "Now it's going to the next level."
With video on demand will come a raft of other interactive services that, at various times, have also been declared dead before arrival: games, shopping and e-mail, to name a few.
Motorola, the biggest advanced set-top box maker, now has deployed in North America 18 million digital, set-top boxes capable of video on demand. The key to taking all those boxes live for video on demand is getting cable operators to retool their "head-ends" -- the massive computer servers that make modern cable networks run.
Motorola executives estimate that they alone have outfitted more than 1,600 cable head-ends around the country for video on demand. All the majors -- AT&T, Time Warner, Cox, Comcast -- can deliver video on demand, and smaller players are also jumping on the bandwagon.
Cable operators are planning to deploy two varieties of video on demand: a straight transaction, where consumers pay, say, $3.99 for "renting" a movie from hundreds residing on the operator's servers; and so-called sVOD, where consumers pay a monthly subscription fee for downloading an unlimited number of programs per month for specific categories.
"Suppose you miss The Sopranos; you could check out any archived episode," said Scientific Atlanta spokesman Paul Sims, demonstrating the technology on a TV at the company's booth. "When I can get as many as I want, the usage pattern for the service becomes a lot different than a pay-as-you-watch model."
For people who forget to program their VCRs or digital video recorders, a subscription video-on-demand service would have an obvious appeal, Sims said. Sims said Scientific Atlanta boxes are being deployed for video on demand at 25 sites around the country by operators such as Time Warner and Adelphia.
Motorola and Scientific Atlanta are also preparing to roll out set-top boxes with 40-GB or higher hard-drives, which would enable cable operators to go head to head with the TiVos, Replays and other personal video recorders of the world.
Even if video on demand truly takes off, personal video recorders and VCRs will have their place, though, according to an executive for Gotuit, a video-on-demand software company: "I think consumers still want a sense of ownership," he said.
