As the lines between television and Web video become increasingly blurred, cable is facing new challenges to its position as the dominant source of entertainment in the living room. The emergence of Hulu, Netflix, Google TV, and other Web-based devices and services is increasing demand for “TV 2.0” that combines elements of television and the Web into a single consumer experience.

Cable already has staked out one important position in the battle that is on the horizon: Its growing deployment of “TV Everywhere” offers greater flexibility in program viewing, providing subscribers on-demand access to cable content on such broadband-connected devices as laptops and tablets. What cable needs is an experience that fuses the choice and control that subscribers find on the Web with the seamless and consistent video quality and reliability of service they have come to expect from cable television. What cable needs to do is to rethink video on demand (VoD).

More than any other product, VoD offers operators and programmers the opportunity to trump the viewing trends that are driving Web 2.0. Using the industry’s managed networks, backend infrastructure and existing set-top boxes, cable already delivers all of the sights and sounds that are optimized for a 10-foot environment. By combining VoD’s strengths with Web-like functionality, cable can create a next-generation product that increases subscriber attraction and retention and generates new revenue.

On demand can be transformed from a subset of the operator’s video-voice-data bundle to a driver of subscriber growth, satisfaction and revenue.

Admittedly, the growth curve for VoD to date has been gradual. The fragmentation of cable set-top boxes and the architecture of existing VoD menuing have made the creation of a user-friendly interface challenging. New releases of EPG and VoD menu software packages can take between one year and two years for development, testing and certification before they are made available to operators. And competition is stiff from third-party content providers and even the operators’ own DVRs. Rentrak’s annual State of VoD report notes that active users averaged just two purchases per month in 2009. Yet the same report showed that overall usage was 3.1 billion hours, underlining the desire of subscribers to access what could become a boundless universe of content.

To realize the full potential of VoD rollouts, the industry must accelerate its development of new ways to expand the availability of on-demand content. Equally important, there will be value in the deployment of new interfaces, enabling a full-content, “iVoD” experience that includes:

• Navigability of content from multiple sources, including not just traditional VoD offerings, but also linear and interactive television, Web video and user-generated content;
• Better search and discovery that allows viewers Web-like visibility into all available content via a single search;
• Personalization that allows each member of a household to create and view interfaces that show content of relevance to that viewer; and
• Recommendations that allow content to “find” the viewer via stated preferences, viewing behavior, data from social networking sites or even new apps that offer visibility into what friends are viewing now.

Using legacy, EBIF-enabled or tru2way set-top boxes in combination with cloud-based processing, operators can overcome the fragmentation and limitations of set-top boxes to deliver the navigation and personalization that subscribers seek. The availability of previews and trailers, links to favorites and recommendations and personalized menus can change the way subscribers engage with VoD. Ultimately, those same interfaces can open the door not just to on-demand content, but to Web-like applications that will fully deliver on the promise of TV 2.0.

Jeremy Edmonds is director/Technical Business Development at ActiveVideo Networks. Contact him at j.edmonds@activevideo.com.

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