Gorfine Marches up VOD Hill: the creator of Federal Hill Communications discusses the future of VOD, pay-per-view and personalized enertainment

Cable World, Nov 20, 2000 by Tim Clark

In response to the voracious demand within broadband, interactive and on-demand arenas, Bethany Gorfine -- a broadcasting and entertainment industry veteran with more than 20 years of experience -- launched Federal Hill Communications in 1993. The company specializes in negotiating, licensing and marketing video-on-demand content around the globe. Federal Hill has forged alliances with Alcatel, Pixstream, Shaw Cable, Sprint, Four Seasons, Compaq, Motorola, nCube, Oracle, Stellar One, Storage Concepts and Sun Microsystems. In this Cable World exclusive, Gorfine clearly envisions VOD reaching beyond the pure movie offerings to accommodate documentaries, biographies, children's programs, music, sports, games, travel, financial and lifestyle programs.

CW: Who does Federal Hill cater to?

When you talk about the types of clients who are always calling us, it could be a telephone company whose former primary function was not delivering entertainment but delivering dial tones. Now it's become voice, video and data, which means we deal with the utility companies and the system integrators that are going into hotels to completely retool their security systems and their front desk applications. They're wiring their high-speed Internet, and they're saying they also need to deliver movies. When it comes to VOD, we still have to educate the consumer. Cable operators finding product specific to their area will be the deciding factor for VOD.

CW: The technology side of VOD garners a lot of attention Why has there been relatively little attention given to content?

We came up with the slogan: "We truly are the last mile." Everybody focuses on the delivery system. The technology has to work. The phone companies, for instance, have a mantra that 99.99% of the time, there has to be a dial tone. They know their customers depend on them to pick up a phone whether it's in a hurricane or a disaster, and there will always be a dial tone. They're not about to release a technology that's going to fail them. Only after rigorous testing do people ask how to obtain movies.

CW: What are some of the emerging niche markets for VOD?

I certainly love the hotel business. And it's not just movies that are going to drive it. If you're on vacation with your kids, for example, you need children's programming in there. If you are a traveler, you may want to see other destinations to go to. Sometimes you don't have 120 minutes to be in your hotel room, or you just want financial news.

Hospitals are another environment. If we're providing movies to a hospital, we're obviously going to stay away from titles like Terms of Endearment. So what do you provide? If there's a children's ward, I'll provide the most fabulous children's product I can find. With Medicare and HMOs, whose going to pay for it? Maybe you'll have to put it on your credit card. Or you go to Bill Gates and have him underwrite it.

CW: How does Federal Hill differ from a DIVA, Intertainer or In Demand?

They can all be my colleagues, or they can all be my competitors. They all focus on a certain aspect of the business. DIVA and In Demand cater to cable operators. Our focus is on any type of delivery system. Whether it's by the phone company, utility, residential, hotel, cruise ship, university- we solely devote ourselves to content, and we don't have any hardware associated with that. We just want to make sure that whoever our client is, we learn as much as we can about them, so that when we approach the content suppliers, we certainly know that their negatives are going to be protected and secure, and that they're going to get paid. We're constantly looking at the data to go out and negotiate.

For instance, if you put something on a system, we look at the marketplace to see who the ultimate customer is going to be. If it's a community that has a tremendous amount of children, then you want to load it up with a lot of children's product. If it's a community that is seniors, well, you might want to give them a lot more travel and financial information.

CW: So where the others focus on national distribution, you focus on customized product?

Yes. In Demand is buying for the United States. Suppose you're in a Hispanic area, and you want a lot of Hispanic programming. I don't believe they do that. We do. We also don't focus solely on the United States; we have worldwide clients who need content in different languages. We have a client in Sweden who needs Swedish movies.

CW: So you have to educate yourself on overseas content as well?

Yes, we certainly have to be aware and talk to our clients about what their needs are and what their viewers' needs are going to be.

CW: How does VOD penetration overseas compare to here?

Percentage-wise I am not sure about, but it is certainly much further ahead than we are here.

CW: Why are our overseas counterparts more digitally advanced than we are?

They are just used to a different delivery system. Even in the remote areas, there's always a satellite dish on top of every house. They are very used to receiving entertainment. That's what they do. But I would also say the phone companies and cable companies are the same.