Video-on-demand take two: Minnesota utility group revives concept with trial

Movie lovers in St. Cloud, Minn., soon may have an alternative to traditional pay-per-view and video stores. DemandVideo revealed last week that it has paired with Seren Innovations to conduct field trials for its video-on-demand service.

Since May, about 25 Seren customers have been testing the VOD service, which gives users a choice of movies and all the functionality of a VCR - play, fast-forward, rewind, pause - via the same set-top box and remote control that accompanies Seren's Astound cable TV service. Along with cable, Seren, a subsidiary of Northern States Power, provides local, long-distance and high-speed Internet services in the St. Cloud area.

The current testing is aimed at exploring both back-office software integration and the robustness of the company's HTML-based navigator, said Susan Marr, vice president of sales and marketing for DemandVideo. For the trial, the system was outfitted with about 75 movies, but DemandVideo will ultimately strive to offer between 300 and 500 titles.

Also, while the test server holds 300 video streams, catering to 3000 active VOD subscribers, it can be upgraded to thousands of streams that would cater to tens of thousands of subscribers, Marr said. Viewing prices will vary, with new releases costing $3.95.

Mike Noer, manager of mass market marketing for Seren, predicted that VOD will be "a major hit with consumers" and is positioning the service against video rentals. People will not only enjoy the flexibility, but the fact that there are no late fees, no need to rewind and return the tape and no tape quality issues, he said.

Despite several previous failed attempts by cable operators to deploy VOD, the technology has matured over the years, becoming smaller internally and easier to use externally, Noer said. More important, the technology has become cheaper, making it more affordable for consumers, he added.

DemandVideo has cut costs by using an open system solution that gives it access to a consortium of vendors. "We feel this is a very low investment for operators and a high revenue service for them," Marr said.

The two companies plan to take the service to the East Bay area of San Francisco next year.