CMC Launches Packaged Pricing for its HITS Quantum and VOD In a Box Offerings

Comcast Media Center (CMC) announced Tuesday that its HITS (stands for "Headend In The Sky") service--which provides centralized content-management and distribution solutions for cable operators serving smaller markets--has introduced packaged pricing for its linear programming platform, HITS Quantum, and its video-on-demand service, VOD In a Box (note: the latter is offered in partnership with Arris). The company says that the new pricing structure allows cable operators to offer linear programming from HITS Quantum's HD, SD and "Classic" line-ups, while adding the managed VOD service at a reduced rate--thus lowering the bar for launching VOD. It says that the new pricing structure serves as an alternative to an already-reduced flat-fee structure, permitting affiliates to pay monthly fees based upon subscribers "at rates that reward cable systems using a broader range of HITS services."

According to CMC, VOD In a Box delivers up to 3,300 hours of centrally managed VOD programming per month, including HD content. Under the new pricing structure, the company says, a cable system with 2,500 digital customers that utilizes HITS Quantum could potentially launch a complete VOD solution for as little as 31 cents per subscriber, per month.

CMC also announced Tuesday that it has launched a marketing kit for VOD In a Box affiliates that is designed to support the launch and usage of locally branded VOD services. The kit is comprised of cross-channel spots, a customer education video, print advertising and point-of-purchase materials that affiliates can customize with their own local branding and sales information.

In addition, CMC released Tuesday analysis from a case study conducted with VOD In a Box affiliate, Glasgow EPB, that covers the first four months following the latter's launch of the managed VOD service. It claims that the analysis found that VOD revenues increased 117% during that period and that the service currently generates $3.50 in additional per-digital-customer revenue per month. "On-demand services represent a very effective way for cable systems to improve their subscriber retention and increase digital customer penetration and revenues," CMC SVP and COO, Gary Traver, said in a prepared statement. "VOD In a Box is generally the most cost-effective method for HITS affiliates to harness this potential and strengthen their role as the premier video services provider in their communities."

CMC recently launched an online business-modeling tool, called the "VOD Valuation Tool," that is designed to assist smaller cable system operators to evaluate the cost and return on investment of launching VOD In a Box. According to the company, the tool draws on analysis of cable systems that have already launched VOD In a Box; and allows operators to input customized data, specific to their system architecture and market, in order to determine, among other things, the expenses and additional revenues they can expect in the first five years after they launch the service. CMC says that the tool can also help operators project how long it will take for their VOD offering to generate a positive return on investment. CMC claims that an earlier analysis it conducted found that operators using VOD In a Box increased their pay-per-view revenues on average by 17% per month for the first 12 months after launching the managed VOD service. In addition, the company says, most systems generated further revenue growth by increasing their premium channel revenues through SVOD services, and by growing their digital subscriber bases through increased sales and reduced churn. CMC's analysis also found that VOD In a Box reduced capital expenditures by 25-50% and operating expenses by 30-50% over a regular VOD system. Based on this analysis, CMC claims that the potential discounted payback for operators that use VOD In a Box can occur within 13-18 months of operation, as compared to the 30-40 months typically required for launching a regular VOD system. According to CMC and Arris, VOD In a Box allows cable operators to accept content from multiple sources, without having to manage it at each headend, thus eliminating the need for multiple VOD servers and on-site asset management. Centralized services available through the offering include acquiring and managing content, creating and validating metadata, pitching VOD content to Arris servers, and providing 24/7 quality assurance monitoring. CMC also offers a secure Internet portal that enables operators to track when programming has successfully propagated from the CMC catcher to the local VOD system: the portal can list VOD assets by programmer, or provide a total view of all VOD assets.