By Ron Miller
Cox Cable has launched Video on Demand (VoD) services with the help of Internet Photonics, a move that could signal that VoD over optical wires is ready to enter the mainstream.
The first Cox VoD system using Internet Photonics equipment went live this week in Omaha, Nebraska to 330,000 homes. Cox has a national customer base of more than 6.5 million homes.
This news follows Ciena's announcement last month that it intends to acquire Internet Photonics for $150 million.
With the Internet Photonics position as the market leader in optical Internet Transport, Cox joins six other cable companies including Adelphia, Cablevision and Buckeye Cable Systems offering VoD using Internet Photonics equipment, giving them more than 12 million VoD homes passed.
Amid the dot-com shakeout during the past few years, Internet Photonics found a way to thrive by focusing on providing a way to deliver voice, video and data from a single network.
"Internet Photonics equipment can transport all these services and carry them on separate wave lengths of light, rather than forcing the buyer to have three separate physical networks for voice, video and data. It's a lot easier to deal with one network and one set of boxes then three separate networks," Doug Broad, spokesperson for Internet Photonics, told internetnews.com.
Analyst Joe Laszlo from Jupiter Media (the parent company of
interenetnews.com) sees steady growth for VOD over the next several years. Laszlo said Jupiter forecasts show 12 million VOD capable households were in place a the end of 2003 and that number was expected to grow to 31 million by end of 2008.
This will drive a la carte movie oriented revenues from $218 million at the end of 2003 to about $1.6 billion by end of 2008, he said.
Still, Laszlo cautions that VoD is by no means a slam dunk, especially as competition from a variety of entertainment sources come into play. "We are at an interesting point where there other ways to gain access to [what consumers want to see]," Laszlo said.
He pointed to services such as online DVD rental outfit NetFlix and set top recording boxes such as Tivo as two examples. "When you look it at that way, VOD becomes one new video entertainment service among many."
Nonetheless, Laszlo said he thinks VoD is a way for cable companies to generate and maintain other business, such as digital cable. "I don't want to sound like we are down on VoD. It's a very important service, both in and of itself and as a value add to move customers to digital cable," Laszlo said.
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