Telco TV

Enriching the Online Experience

7/15/2005 8:00 PM Eastern

When Verizon Communications Inc. introduces Yahoo! Premium as an alternative default portal for its digital subscriber line service later this summer, it will be the first broadband provider to offer subscribers a choice among rich-media opening pages.

Verizon, which has been bundled with the Microsoft Network home page for several years, plans to add “more portal options,” a spokeswoman explains.

KEY DIFFERENCE

The Verizon-Yahoo! Inc. package, which has not yet been unveiled, takes on added significance amidst the escalating broadband-content battle between DSL and cable providers — especially given Yahoo!’s own growing focus on added-value content such as games, short movies and music.

The Internet content provider has offered a non-premium portal on SBC Communications Inc.’s DSL service since 2002.

Cable companies are also looking at their portals and the content they offer as critical elements in the evolving competitive environment.

“We look at the Cox.Net 'Start Page’ as the start of our customers’ Internet experience,” says Winston Warrior, director of high speed Internet marketing for Cox Communications Inc.

He says Cox is trying to add “local content in every market that is relevant to each community,” characterizing such features as “the differentiators” from DSL.

CHARTER’S APPROACH

Charter Communications Inc. uses Synacor Inc., an aggregator of broadband content, as its portal partner in all systems.

Charter and Synacor’s “High-Speed Plus” bundle can be purchased for an extra $7.95 per month. It includes graphics-rich Web content from Cable News Network’s NewsPass, The Weather Channel, American Greetings, GameBlast and Major League Baseball.

“We’ve had some small successes,” says J Schelstrate, Charter’s senior director for high-speed Internet product management/marketing.

“We’ll be more aggressive with High-SpeedPlus during the third and fourth quarter” of this year, he says.

Beyond the portal itself, games and other content are assuming ever-larger roles on the broadband menu. In particular, interactive gaming is driving bandwidth offers at many MSOs.

Several MSOs say aggressive gamers are the most frequent users of their highest-speed services, and that their usage will determine upgrades to faster service levels.

“We know that upstream [speed] is very important to gamers,” says Warrior. “We continue to evaluate what we’d like to do.”

Comcast is also focusing on “The Fan,” its umbrella name for nine collections of content in categories such as sports, music, kid’s material and gaming.

“When we originally launched it, we had it on our home page,” says Suzanne McFadden, Comcast’s vice president of marketing for high-speed Internet. “Now we have nine Fans in each of our content areas. The Fan is unique. Customers who use The Fan are the top most satisfied customers we have.”

Cablevision Systems Corp. offers Rhapsody’s streaming radio service as part of its $4.99-per-month core content package. The Optimum Arcade includes free downloads of more than 280 games, with several new games added every month.

VIDEO’S FINE LINE

As higher-speed services are better able to present full-screen moving video content, the differences blur between traditional TV (especially video-on-demand) and Internet TV.

With that in mind, MSOs and programmers are treading lightly into what they call “alternative means of distribution rules.”

Although programmers and carriers decline to talk on the record about these restrictions, they basically affect the ways in which producers and program networks can offer their content online if they want to maintain their linear network relationships.

“The landscape is changing so fast that no one has figured it out yet,” says Channing Dawson, senior vice president of emerging media at Scripps Networks.

For now, Scripps is handling the situation by packaging programs from its networks into short-form video clips that run from one to four minutes.

Dawson’s team has re-edited and re-purposed about 5,000 short segments from its networks such as Home and Garden TV, DIY Network and Food Network. “We touch every bit of content.”

He refers to this “multi-tiered approach” as a “strategic shift in the way we’re doing broadband: a lot of thinking about original programming.”

“Broadband is a new way to engage viewers,” Dawson says. “We’ve announced an entire strategy. The next phase of development will go into vertical video programming for broadband.” He cites a “channel” about kitchens that will be available by early 2006.

While developing VOD broadband content, Scripps and others — such as CNN, Discovery Channel and others — are careful not to scavenge their core video offerings.

Synacor has affiliations with 21 Internet service providers, almost all of them broadband carriers. It has bundled collections of content for services such as the Adelphia Music and Charter Music packages, according to Synacor president and CEO Ron Frankel.

“We’re starting to see the implementation of the cable model on the Web,” he adds, noting the expansion from basic to extended basic and premium services. “Music is the HBO of this sector.”

Broadband may have started with speed, but the finish line is loaded with compelling content — both the kinds packaged by familiar producers and the original material created by users, sometimes with the help of tools from companies such as Yahoo!.

September