VCinema Digital Plans Broadband Video Service

HUNTINGTON, N.Y.— A start-up broadband video download service, called VCinema Digital, announced plans for a September 2005 launch of its hardware and services through consumer electronics retail stores.

VCinema Corp.'s CEO Adam Zeitsiff said the service will launch with a set-top box, which is called a “Digital Theater,” that combines a hard-drive-based DVR, and DVD player. Hardware pricing is expected to be comparable to step-up DVRs.

Users will connect to the VCinema service using DSL, cable or satellite broadband services to access daily program data to fill a 14-day electronic program guide. Users can use the guide to find and record to a 160GB to 200GB hard drive programming from cable, satellite or terrestrial broadcasters. The connection is also used to download what amounts to pay-per-view content from the VCinema service.

The movie downloads will be handled using an unusual Virtual Library function, which will enable subscribers to review and download feature films and specialty programming, and remotely store purchased movies for unlimited viewing.

It also allows users to decide how much of their hard drive capacity they would like to reserve for downloaded programming, and how much they wish to reserve for regular DVR applications.

Under the VCinema model, subscribers may elect to download movies for rent or for ownership, at fees comparable to those charged by video rental stores and DVD retailers. This is in addition to a “TiVo-like” (less than $12.95 per month) monthly subscription fee for the program guide service and other features.

In addition, the service will provide “base content” such as music videos, sports updates and so forth.

VCinema has developed Microsoft-based DRM software which will delete downloaded movies from the hard drive at the end of specified viewing windows. If a subscriber elects to purchase the movie, the title may be placed on remote servers through the Virtual Library as hard disk space runs out in the set-top box. The movie can then be downloaded and viewed repeatedly at no additional charge.

“Our box is not a PC. It was designed as a conditional access device, so it performs a variety of checks to make sure content is secure,” Zeitsiff said.

The company is currently licensing feature films from leading studios, and will include a large selection of specialty programming, including sports, children's programming, popular TV series, and documentaries, among other things.

“The most important thing for us was to provide mainstream content that people want, not necessarily shows on knitting based out of China,” Zeitsiff said.

Download times for an average feature film run between 30 and 40 minutes, at between a 500 and 700Kbps rate. But, Zeitsiff said the system is designed to begin playback as the movie is downloading — a feature the company calls Progressive Play — “so you can start downloading and watching a movie in less than a minute.”

VCinema compresses content using H.264 algorithms, allowing D1 (480 by 720 pixels) resolution or greater.

Zeitsiff said VCinema will launch through consumer electronics retailers “because they have the brand, they have the presence and they have the trust of the consumer, and they can give us the ability to get it in front of people and show them all of the benefits.”

The company will support the service with advertising starting in the early summer, using regional radio, print and Web spots.

Retail terms are still being formulated,” Zeitsiff said, but residual commission structures are being considered.

VCinema is a privately owned company, which is backed by “a number of venture capital partners,” Zeitsiff said.