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Starz Entertainment Group Unveils Next Generation of On Demand

President/CEO Robert B. Clasen Outlines New Programming, Navigation Tools,

Educational Campaign Specifically Designed for the On Demand Experience

Tells NCTA Academic Seminar On Demand is New Form of Media,

Requiring Radically Different Approach from Linear Channels

Predicts Portable Devices Will Soon Mean On Demand Anywhere

as Well as Any Time

SAN FRANCISCO, NCTA National Show, April 3 /PRNewswire/ -- Starz

Entertainment Group LLC (SEG) President/CEO Robert B. Clasen today unveiled

details of what he said is the ``next generation`` of on demand. In a keynote

speech to the Academic Seminar held on the opening day of the National Show,

the National Cable & Telecommunications Association`s (NCTA`s) annual

convention, Clasen called on demand television an entirely new medium that

requires programmers to abandon all conventional, linear channel thinking and

reinvent their businesses.

Key elements of the next generation of on demand were launched by SEG

April 1. They include:

* The use of ``button bonuses`` to provide an opportunity for viewers,

when they select a movie, also to watch complementary short-form

programming and/or to be offered suggestions about other movie options

in the same genre. This feature simulates an interactive experience

by recognizing and reacting to the film choice the viewer makes.

* A new navigation system to enable viewers more easily to find the

on demand programming they want;

* Premiering major movies on demand on average two weeks before they air

on the flagship Starz channel;

* Expanded consumer education programs in conjunction with affiliates;

* New, unique on demand programming and promotional stunts that combine

movies with short-form programs, behind-the-scenes footage, and

interviews;

* Airing movies -- including foreign language, niche and independent

films -- exclusively on Starz On Demand that would likely not find a

home on the linear channels;

* Changing the mix of programming to make use of the fact that in the

on demand world there can be hundreds of movies available in prime

time versus the one prime time movie per channel that is possible in

the linear world.

Clasen also predicted that the definition of on demand will soon expand to

mean not just the ability of viewers to watch programming whenever they want

but wherever they want as well.

Like telephones, Internet access and music, television is rapidly becoming

a portable communications service, he said, propelled by a range of new

portable devices flooding the market. ``The days are rapidly drawing to a

close when television is something that happens only at home.`` Key to the

further development of portability will be a secure digital rights management

system, he said, to ensure that ``portability does not mean piracy.``

Two years of experience with on demand has demonstrated that it is not

enough simply to dump a lot of content into the on demand format and then hope

subscribers will find it, Clasen said. ``That can work for a few people for a

while, but if we want to make this form of television viewing a truly mass

medium, programmers need to do a lot more.``

Clasen noted that half of digital cable subscribers with on demand do not

use it regularly, even though it is free. Program promotion has historically

been the role of programmers, but first efforts with on demand focused on

technology issues. ``The name of the game early on was simply putting

programming on the servers,`` Clasen said ``and while some believe that tonnage

is the answer, whatever amount of programming is offered on demand,

distributors will need to promote and guide consumers to an entirely different

and improved entertainment experience.`` Billions of dollars are at stake in

the effort to persuade more viewers to make use of on demand, because the

evidence shows that on demand use cuts churn by 15-20 percent.

On-demand allows Starz to present a much wider array of programming,

particularly in prime time, than was possible in the linear world, Clasen

said, adding that this should be good news for independent film producers as

well as viewers.

The marketing of millions of new portable video viewing devices will

further change the landscape, he added, creating demand for short-form

programming that can be seen while viewers wait in the doctor`s office or ride

the bus to work.

At the same time, he noted, the world of linear television will not go

away although on demand will cause changes in the linear viewing habits.

People will still want to watch television in their homes for many generations

to come, he said, because the simplicity of linear television viewing will

continue to be an attractive proposition in a world of increasingly varied and

complex choices.

Starz Entertainment Group LLC (SEG) is the largest provider of premium

movie services in the United States with approximately 173 million pay units.

SEG offerings include the Starz Encore Movie Pack with 13 digital movie

channels and more than 750 movies per month, Starz HDTV, Starz On Demand, and

Starz Ticket, the first and only on demand premium TV subscription service

available on the broadband platform. Starz Entertainment Group is a wholly-

owned subsidiary of Liberty Media Corporation, http://www.starz.com.

-Jason