Videos are coming to a phone near you

SO what did you watch on telly? A bit of James Bond? Another bout of Jim Davidson? Did you miss Victoria Wood and end up videoing another "funniest moments" repeats compilation? Imagine, though, if every film in your local video shop had been available at the press of a button, if a phone call could bring them through your TV. Well, the day is coming: video on demand (VoD) is here, and the death of the video store is just around the corner: wall-to-wall movies are now coming phone to phone.

Eight thousand London households have already had a glimpse of this future. Subscribers to the Home Choice service can choose from a menu of around 1,000 PPV (pay-per-view) films, as well as time- shifted TV programming. Scroll down, pick your flick and press buy. Seconds later you're watching your chosen film (at 1.99 to 3.49 a time). The service has been on trial in London for more than a year, but was properly launched within the M25 area in late September.

ADSL (Asymmetric Digital Subscriber Line) technology is the miracle that makes this possible. It's essentially a way of sending vastly more data down your existing telephone line from your local BT exchange than previously possible, enabling real-time screenings to happen (even more usefully, it allows you to make calls at the same time for when you have a sudden craving for a meatfeast with extra anchovies).

Worrying times for video-rental stores, you might think, but Blockbuster (7,300 stores with 65 million customers worldwide) for one, has already seen the way the tide is turning. Last January, the company's chief executive John Antioco revealed that the company was developing a way of delivering movies to Tivo VCRs, the new smart computer hard drive-based video recorders launched in the UK in October.

Blockbuster is also to launch a VoD service to two US cities in 2001 (nine per cent of US households already have a broadband connection, so it'll be a relatively easy transition). It is also selling subscriptions to DirectTV (a US equivalent of SkyDigital) from its stores. The reward? A cobranded Blockbuster/DirectTV PPV channel on satellite TV.

Could the same thing happen here? Blockbuster UK won't comment, but BSkyB is already thinking along the same lines. It is looking at launching a VoD service in 2001.

In future, though, competition might come from an unlikely source - Hollywood studios. 'They love the idea of pay-per-view," according to Home Choice boss Simon Hock-hauser. "For every pound spent on PPV, the studios get at least 50p. Traditional video rental is much less profitable."

Not all is sweetness in the world of VoD, however. Yes TV cancelled its much-hyped flotation last autumn, while five other companies (Telewest, NTL, Global Crossing, Worldcom and KPNQwest) have all recently abandoned plans to offer national ADSL services via BT. The reason? What BT was charging for the privilege.

'We're subsidising each customer to the tune of 1,000 - it's ludicrous," says Mr Hockhauser. He's happy to pay to get in first, because Home Choice wants to stick a load of extra services on top before anyone else gets in.

"In 2001 we'll add normal broadcast TV channels, as well as the sort of smart, real-time pausing facility that the new generation of hard-disk recorders offers." He also plans CD-quality music on- demand services plus, later in the year, "board-type" video games.

Later still, from 2002, we are promised "the really sexy stuff", with multi-user video games, as well as cheap telephone services, with everyone in a house having their own phone line, and calls at a fixed cost.

Exciting as Home Choice is, anybody expecting to see the very latest films via VoD may still be a little disappointed. "We offer roughly the same lineup that you would get on the Box Office service from SkyDigital and Front Row on cable," admits Hock-hauser, "so we're still about six months behind Blockbuster - it'll be a couple of years before we're on truly level pegging."

Copyright 2001
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