Cable Based Video-On-Demand to Generate Revenue of $2.8 Billion in 2006, says New Yankee Group...

Business Editors/High-Tech Writers

BOSTON--(BUSINESS WIRE)--Nov. 4, 2002

Video rental store revenues protected in short term by earlier

access to new releases

Over the last 18 months, leading cable operators have rapidly deployed video-on-demand (VOD) for

three reasons: to differentiate their service from direct broadcast satellite (DBS) services, to improve the value proposition for digital cable and to produce incremental revenue from their upgraded networks. With the growing penetration and increasing breadth of VOD content, pay-per-view and subscription VOD will generate combined revenues of $2.8 billion in 2006, according to a new Yankee Group report titled "Video-on-Demand: Sustained MSO Commitment Drives Rapid Growth."

"Despite falling stock prices and pressure from Wall Street, most major MSOs have continued to deploy VOD," said Adi Kishore, Yankee Group Media & Entertainment Strategies analyst. "With content availability growing and VOD technology maturing, the supply side hurdles are largely resolved. MSOs must now shift their focus to the demand side and concentrate on marketing and consumer education to drive usage."

The report also found that growing VOD availability and usage will begin to divert video rental revenue. However, rental stores' earlier access to new releases from the major studios will limit the impact over the next few years.

NOTE TO EDITORS

For interviews, please contact Adi Kishore at akishore@yankeegroup.com.

THE YANKEE GROUP (www.yankeegroup.com)

The Yankee Group is a global leader in technology research and consulting. Our customers, which include technology vendors and users, benefit from our accurate, reliable, and trusted research, consulting, and personalized one-to-one client interaction covering communications and IT products and services. Now in our fourth decade, the company is headquartered in Boston and maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.