ONLINE EXTRA: Q&A With Matt Strauss

By Shirley Brady Since former Mag Rack general manager Matt Strauss joined Comcast in early June—as its first VP for On Demand programming, reporting to EVP programming investments Amy Banse—he’s been busy developing Comcast’s first proprietary VOD networks under the umbrella of Select On Demand (www.selectondemand.com). His first batch of new channels—a diverse mix including guitar lessons, anime, boating, cooking, fitness, gambling, home improvement, "modern manners", parenting, pre-K kids, wheels and wings—launches this month. CableWORLD: How are you enjoying life at Comcast? Matt Strauss: Everything’s been terrific. I’ve been here for a few months and from the day I started I really feel like I hit the ground running. Everybody has been incredibly supportive by including me in strategic discussions and meetings. I really feel like I’m part of the team. For someone who’s as passionate about video on demand as I am, I can’t imagine being anywhere else. CW: You must appreciate Comcast On Demand all the more now with two toddlers at home. Strauss: My 2 1/2 year old just can’t get enough of the PBS Kids and HIT Entertainment stuff on demand. Every morning he wants to watch Bob the Builder. All that’s only going to get more robust and better. CW: What attracted you to this new position? Strauss: I’ve been involved with on demand for about five years now. Every one year of on demand is like a dog year, and I’ve seen so much of this space evolve over the past few years from the time not so long ago when we thought on demand was just going to be movies to today where there’s thousands of hours of content that’s available on demand from multiple sources. Everyone is talking about on demand taking off, and now that I’m here at Comcast, it’s clear that it has taken off and we’ve arrived. CW: Arrived in what sense? Where do you see on demand being at this point in time? Strauss: As amazing as on demand is doing, it’s also amazing to see just how much video on demand is being integrated into how people watch television. For example, here in Philadelphia, every month roughly 60% of Comcast’s subscriber base is using on demand and we’re reaching about 50 million views of on demand programming, which means 50 million times that people aren’t watching linear TV. At the same time, I feel like we’re just scratching the surface of what’s possible. There is an endless number of ideas of where we can take on demand, and that’s what I’m now looking at. My role is where do we go from here? And how can we create new services, original services that really take advantage and maximize the platform? CW: What did you learn at Mag Rack that you’re bringing to Comcast? Strauss: There are certainly a lot of lessons. The overarching lesson that I’ve learned is that VOD can and should be much more than movies and that special-interest content certainly has a value and a place. That might seem somewhat obvious today, but it wasn’t that long ago that the thinking was that VOD should be just movies. CW: So describe exactly your new role at Comcast. Strauss: I am now at the stage where I am looking at incubating and developing new stand-alone channels for on demand and I have moved beyond looking at creating linear networks, but bringing that same focus and energy as goes into a new linear network into creating new stand-alone made-for-VOD networks. That’s been my focus these past few months, and we’ve developed about 10 different networks in the last 90 days that we’re launching between now and the end of November. There’s no shortage of ideas here. We’re looking at incubating these services that we create from inside and also working with outside producers and outside production companies and investing in libraries and start-ups so we can create almost like a web of experts, enthusiasts and people who are passionate about video on demand and oversee that process to really push this platform forward quickly. CW: Tell me about this first round of VOD networks you’re launching. Strauss: There are several channels we’ve created. The overarching message here is that we are incubating new networks for on demand and they range from underserved opportunities on TV, new content areas to creating applications. So we’re looking at taking Dating On Demand outside of the Philadelphia market into other Comcast markets. So we’re aggressively moving forward in the creation and incubation of these new networks. CW: How will you localize Dating On Demand in these new markets? Strauss: We have a plan in place but the interesting thing about Dating On Demand is it’s as much a utility as it is a source of entertainment. It’s a lot of fun, and a lot of people are using the service. I came home after work one night and my wife was watching it. I’m not sure if she was trying to tell me something (chuckles). She just thought it was fun. But absolutely there is a local component to this that we want to keep intact, but we think that even if you’re watching in Philadelphia you’d be interested in seeing people from Chicago, Boston, Florida and other areas. So I think there is a way to program this kind of a service with both a local and national element to allow us to make it scalable. CW: What about adding some interactivity to it, so viewers could also vote on the top 10 videos on the service, locally or nationally? Strauss: Absolutely, and that is actually an important component of what I look for when creating these new services. Because that level of interactivity is not that far away. I’m not waiting for that technology, I’m trying to build the infrastructure today that will allow us to do that quickly when the technology becomes available in the very near future. CW: One of your new channels—guitar lessons on demand—echoes Mag Rack’s Guitar Xpress. Strauss: That’s one of a couple of the first of these new channels that I’ve created that are already out there. I’ve created a service within Comcast called Select On Demand so guitar lessons falls within that, and I’m using Select On Demand almost as a holding company to develop new networks. I’m approaching these all as individual services, versus one service trying to cater to many different interests. So these are all individual networks, all meant to add value to the platform. Some of them I think could ultimately resonate in a way that we could take them out to the rest of the cable industry. CW: Will Select On Demand be its own menu category? For example, Spotlight On Demand [the ad-supported VOD category from Comcast Spotlight, the company’s ad sales division] occupies its own branded category within the Comcast On Demand menu. Strauss: No, it’s not meant to be a consumer brand. It’s a service, like a holding company, that I’ve created which is using that overarching brand to incubate start-up on-demand networks. It’s an umbrella, but ultimately these services will be their own brands. It’s a way for us to incubate and make investments in new services. CW: So these Select On Demand-incubated channels can appear anywhere within the Comcast On Demand VOD menu? Strauss: Yes. You would just see them as the individual services, so guitar lessons would be under the music category of Comcast On Demand. They go wherever we think these individual channels are most appropriate—the most likely place for viewers to find them, that’s where we’ll place them. It’s really looking at creating robust individual networks that are all designed to be stand-alone services. CW: Are you also working with Comcast’s owned networks such as E!, Style, The Golf Channel, Outdoor Life Network about creating more on-demand content? Strauss: That’s an important part of my job, to work with all the Comcast-owned networks and really make sure that our networks are representative of the best of class in VOD services. So I’m actively involved in how our networks are approaching VOD and programming for VOD and really making sure that they are really robust, well-presented and -packaged on-demand offerings. CW: When do the Comcast-owned networks start stepping up their on-demand presence? Strauss: I’ve already started there and I think between now and going into next year we’ll have lots more to talk about that front. CW: When you talk about underserved audiences on television, International Channel [a Comcast-owned multicultural programming service] seems tailor-made for on demand. Strauss: Absolutely. David Jensen [VP, international programming for Comcast] has been really spearheading the development of an international package for on demand. We recently launched a Spanish-language package of content, over 100 hours of on demand, that David also spearheaded, and that is really just the beginning of what David and his team are looking at in terms of creating more international and ethnic content for the on-demand platform. CW: Are you also working with Comcast’s non-owned programming networks? Strauss: With respect to existing linear networks, Matt Bond [Comcast EVP of programming] and his team really take the lead on those discussions, and they include me on those conversations whenever appropriate. So I do participate in those discussions when needed but it’s really Matt Bond who’s working closely with them. If it’s a new network, or a new start-up network, I get more involved in those discussions because I have an active interest in that side, and evaluating whether there’s an opportunity there for those networks to either be included in what I’m creating or understanding how they could add value to the overarching on-demand platform. CW: In the short space of time that you’ve been with Comcast, have you been getting aggressively pitched with on-demand concepts? Strauss: Almost daily. But that’s part of my job, and I know what it’s like to be on the other side as a programmer. So I approach every one of those meetings and discussions by being very open-minded and take them all very seriously, and try to understand does this add value, does this make economic sense and is this an opportunity that we should be exploring? So I don’t dismiss any idea or pitch out of hand until I really listen to it. CW: What if you’re being pitched with something that’s already on the list of concepts you want to develop? Strauss: Our intention isn’t to do it all ourselves. A big part of my strategy, and one of the learnings when I was at Mag Rack, is we shouldn’t necessarily try to do it all ourselves, but we should work with other programmers and find a way to essentially help create lots of entrepreneurs who are very passionate about producing new services for on demand. As far as how that evolves and how that works, we’re taking an active role in managing that. It’s a huge opportunity for us to find a way to work with other programmers to essentially complement what we’re doing. CW: Are you also reaching out to groups—such as the AARP—who already have a connection to an audience you’re interested in servicing via VOD, but who may not consider themselves programmers in the traditional sense? Strauss: Yes. Essentially, my role when I’m looking to create a new service, I’m looking to start up a network in the way that anyone else would look to start up a network. I would look to go out and acquire content and produce original content and form the appropriate relationships with respect to marketing or partnerships and put all those pieces together in creating a new service. So I’m actively involved in doing just that, forming my networks that we’re creating internally. CW: When you talk about these new on-demand networks, the other term Comcast has been using is "virtual channels." Spell out exactly what that means. Strauss: A virtual channel is just a server-fed network, a channel that lives within an interface. When I look at the television landscape, the thing that I am most amazed about is how many programmers really come here still pitching linear channels. I’ve actually seen very few people coming forward using the same energy and focus and creativity in pitching a VOD channel. And that’s what I’m most interested in. Ultimately, I think there’s more value in adding another virtual channel for on demand than creating channel 567 as a linear channel. So I can envision a day where everything has some form of a virtual channel, but I don’t know if virtual is the best word. I think of these as enhanced channels, and to me they’re a better way of watching television. CW: Any advice to folks looking to pitch on-demand concepts to Comcast? Strauss: I’m amazed at how many people in the programming community still don’t have their arms around how VOD works, how our platform looks and what our strategy is with respect to positioning and packaging of VOD. So the first step is they really need to understand where we’re coming from in the VOD world and create services that really take advantage of that platform first, versus pulling together pitches for linear networks and VOD is more of the afterthought. I can’t be more excited about my role in helping on that front. I’ve been given an open canvas to go out there and create new services for on demand, but in many respects I think the biggest opportunity is working with other programmers and finding ways to use my experience and my team to work with them and oversee how their content could work on demand. And then working together to make sure they’re successful. CW: How do you view Comcast’s on-demand philosophy vis-�-vis other cable operators’ commitment to VOD? Strauss: There is no doubt that Comcast has the most robust platform for on-demand content. There are currently 2,000 hours of content available today on on demand, and we’re expecting roughly 4,000 hours of server capacity next year and 10,000 hours in 2006. A server is nothing more than a hard drive, and the capacity increases and the costs go down and you can envision a world where server capacity is just there—it’s like air, it’s unlimited. And that’s core to my role: Where do we go from here, how do we add more content to on demand and make it more robust and add more value to the platform? That’s where I’m focusing all of my energy and attention, and it’s amazing, everyone here is so committed to on demand and so passionate about it that for me. It’s like VOD nirvana. CW: How does your position work in practical terms? Strauss: My role is really split up into two areas. The first is, I’ve been really empowered to go out and create new services for on demand. And within that I look at three different categories. The first is I look at areas that I feel are currently underserved on television but possibly wouldn’t warrant a 24/7 channel but would be very appropriate in an on-demand environment. An example of that would be parenting. The second category: content areas that almost work better in an on-demand environment than in a linear environment. An example of that is fitness, where people want to work out when they want to work out, they don’t want to wait until 6 or whenever a show is on. And the third category: applications designed for VOD. That’s a category where, if you take a page from the Internet, it’s thinking about how can we leverage VOD in a way that actually brings people together. An example of that is Comcast’s Dating On Demand, a service that was incubated in the marketing department and I’m now overseeing. It’s an on-demand dating service where people can use the remote control and look at profiles of people who are essentially selling themselves and looking for dates. You can take that model and extrapolate it to real estate, auctions, jobs and careers. Those are the types of applications that I think could be the killer applications that really take advantage of on demand that almost goes beyond content. So those are the three categories I’m most focused on in terms of both developing services internally at Comcast that we create, and also in terms of investing in start-up businesses and where there could be investment opportunities and libraries to help us grow the platform. CW: So you get to weigh in on the VOD side as start-up networks pitch Comcast? Strauss: I actually have been included in many of those meetings, yes. It’s really very much is a collaborative effort, so in evaluating those kinds of opportunities we have programming department, the marketing department, the programming investments group, and the communication is so good here that everyone really weighs in to make sure that we think it’s the right decision for all of us. CW: And you get to weigh in on the marketing element of on demand? Strauss: I work very closely with Page [Thompson, Comcast’s VP of marketing for new video products] and his team. In many respects, I look at Page as the voice of the consumer. When looking at creating new channels—and we’ve got several channels that we’ve already developed and created and will be deploying soon—that has to go hand in hand with our marketing department, to make sure that what we’re creating is in line with what we think consumers want. CW: Besides content, do you also contribute to other aspects of Comcast’s on-demand strategy such as how to incorporate advertisers? Strauss: That’s one of the things that really surprised me when I joined Comcast, which is how amazing the communications and coordination is across all the different departments and divisions. It’s amazing for a company with 60,000 employees across the company to have everybody on the same page with the strategy and the vision of the company. It’s very much a collaborative effort. When evaluating programming opportunities for on demand, there are several people in several different departments who weigh in, and I’ve been included in those discussions. I come at it from a programming perspective because that’s my background. And I have a good understanding of what works on on demand. My approach is always does this add value, do the economics make sense, and how can we make this work instead of just saying no to a network. And from there, looking at how can we move things forward? CW: So you are also working closely with Comcast Spotlight on how the company integrates advertisers to underwrite or sponsor the on-demand content you’re developing? Strauss: Absolutely. There’s no doubt in my mind that advertising and sponsorship will be the major part of on demand and a significant revenue stream going forward. There are really three pieces that need to come together: on demand getting a critical mass in distribution, a critical mass in usage and some level of standardized reporting and rating systems for on demand. I think we’re almost there. So part of what I’m doing in creating these channels and building them from within Comcast is also creating a way for us to experiment with different advertising models and how advertising could work in an on-demand environment. There’s no shortage of ideas here in terms of how we think that could work. As we test out different models, I’m confident that we will come up with the right approach for how advertising and sponsorship could work on on demand, which we could then use as a template for other programmers. CW: Are you planning to work with CTAM’s On Demand Consortium, which is also exploring these same issues on its advertising on demand subcommittee? Strauss: I have not yet because I’ve only been here a few months and have been really so focused on my new role, but I will. There’s a lot that we can offer the CTAM consortium and I really plan on playing an active role in that. It’s not too far off, and it’s something I miss, and I look forward to getting back to that group. CW: What do you think you could offer them? Strauss: CTAM’s On Demand Consortium is a smart initiative and I know there are a lot of smart people working on it. My personal approach is attacking that with content, and by building new services and creating new content that you can only get on demand. Where we need to head directionally is the notion of "made for VOD" and creating services that resonate with consumers, services that you can only get on VOD and on cable. That’s how the industry really moves the needle forward in differentiating VOD from anything you can get on a DVR. CW: Does Comcast’s on-demand philosophy align with the view of on demand you’ve developed over the years? Strauss: The Comcast philosophy or strategy with respect to on demand is that at this stage, on demand should really be positioned as added value [no incremental charge to the digital subscriber]. We have an incredibly robust platform of programming and a large percent of our digital subscriber base using that platform. So the first objective is to integrate this new technology into people’s viewing habits. In many respects, the pay-per-view business has done us all a little bit of a disservice because people are afraid to push buttons [because they worry they’ll be charged]. So by making this all added value and getting people using this technology and really offering content and technology you can’t get anywhere else, I truly believe in my heart that this is the right approach and the right strategy. It’s also a strategy I believed in before I came to Comcast. It’s not about, at this stage of the game, using video on demand to drive incremental revenue. It’s a way to add more value and differentiate cable from anything else that’s out there. CW: Does it drive you nuts when the satellite guys claim they also offer video on demand? Strauss: To me it’s a moment in time, because ultimately video on demand and DVRs are very different. DVRs are a great time-shifting device, and that’s something Comcast is also deploying. But DVR is very different from how we’re approaching video on demand, which is looking at it as a platform. Our 2,000 hours of content will continue to grow and ultimately it won’t be the name of the platform; it will be the content and branding of the services that we create for that platform that will truly provide the value and differentiation for on demand. I love DVRs, and I’ve had one since there was a 15-hour DVR back in 2000. But I still look at DVR to VOD as like dial-up to broadband: Both get you on the Internet, but two very different user experiences. Getting Personal With Matt Strauss Greatest Joy: Our son Joshua, who is now 2 1/2, and our youngest son Jason, who is now, hard to believe, 8 months. I’m really enjoying this time in our lives, and the best part of my day is seeing my kids. The Big Move: I lived in Philadelphia for about two and a half months and I was commuting back and forth from Philly to New York, where I lived before. My wife and I are temporarily living in New Jersey, and we are looking for a house on the Main Line [in Philadelphia]. Best Thing About Philly: I’m still exploring Philadelphia. My wife and I come out here on weekends and walk around the city, and the one place we’ve found that we really like is Walnut Street and the Rittenhouse Square area. It’s a very quaint, nice area and great for families. We take the kids, get something to eat and there’s a park and a lot of shops. It’s a fun place to walk around, and it reminds us of Greenwich Village in New York. Miss Most About New York: The bagels! Philadelphia has really great restaurants—I’ve been checking out a lot of Stephen Starr’s restaurants—but they don’t have New York bagels here.