• by Wayne Friedman , Staff Writer, April 12, 2006

It wasn't too long ago that cable TV executives regularly talked about traditional video-on-demand services as being the Holy Grail. Instead, for consumers, it might just be a holy Trojan horse.

Who could blame cable executives' initial assumptions? All they needed was to convince viewers to pay a fee of $2, $3, or $4 for a movie or program for immediate, anytime access. All this would be in addition to the $40 bucks or so consumers already spent for their cable programming a month. There's your revenue growth.

Now cable execs are getting their wish--sort of.

Media companies--as a result--are experimenting with VOD deals with cable companies and Internet companies but in a free VOD mode, with advertising attached. Cable operators don't get separate fees for this necessarily, but other residual revenues, such as high-definition and DVR equipment to sell.

Down the road, it could be more lucrative--especially if networks move wholesale into the arena. Remember when monthly cable bills were only $15 a month? How about when theatrical movies were $5?

Some entertainment executives driving a BMW in Los Angeles needs $3.19 a gallon to fill up. Someday that'll be $5. So, in effect, he'll be asking viewers to wash his windows or make him a latte to-go.

Jeff Bewkes, president of Time Warner, might want cable customers to throw in a car wash.

He believes networks should pocket away one day out of a week's worth of programs for VOD services to quicken the VOD business. Bewkes applauds Disney's experiment to offer some of its best prime-time series on its own Web site, www.abc.com, with commercials, but free to viewers, in May and June.

But the real intent of VOD could be lurking in the background. Bewkes' aim is to get viewers to spend more than their $40 or $50 a month in cable entertainment--not to give stuff away for free.

Cable companies are, unfortunately, bucking a consumer trend. Studies have shown cable customers don't want to pay any more on top of their monthly cable bill or their monthly DSL service.

Entertainment executives constantly talk about giving consumers "easy" access to content in every way possible. "Easier" should mean cheaper or free. Instead, it really means spending more money with cable companies.