Munich-based video distributor VCL Film + Medien is backing the launch of Germany's first Video-on-demand (VoD) television service.
VCL has licensed 100 titles from its extensive home entertainment catalogue to Marburg-based [netCom], which begins testing of its service later this month and hopes to have a more commercially viable service delivered by cable and broadband networks by the end of the year.
VCL said that it believes that the growth of VoD will be dramatic. In five years it estimates that one third of Germany's annual video business, which is currently valued at around DM2.1bn ($1bn) will have switched to VoD.
"Through our front-running position in VoD we are securing our position in the largest growth market - alongside DVD - in film licence exploitation for the coming years," said VCL in a statement. VCL says that the 100 films constitute an initial package and that it is in negotiations to licence others.
VCL currently commannds 10% of local video market where 24m homes have one or more video cassette recorders. The company, which went public last year to become the best-performing initial public offering in Germany in 1999, owns the home entertainment rights to about 2,500 feature film and special interest titles including recent hits Sixth Sense, Sleepy Hollow and upcoming releases such Lars Von Trier's Dancer In The Dark and the two Terminator sequels.
Using end-to-end systems that it has developed with Internet Protocol standards, [netCom] expects to reach 70,000 households by the end of the year. With other projects coming on stream by the end of 2000 some 300,000 households in Germany, Austria and Switzerland will be able to access VoD.
On top of the monthly basic cable charge of DM18.50, [netCom] will charge its customers DM40 a month for the decoder and a subsequent DM5 per film.
"The customer potential for VoD does not come just from today's regular video rental clients, but also from every other consumer who shrank away from the rental system," said [netCom] chief Frank Hackenbuchner.