Video on demand has arrived in New York City for digital subscribers of New York's Time Warner Cable, a division of AOL Time Warner. The cable company hopes the on-demand fare will entice regular subscribers to upgrade to digital cable.

The company said it is offering up to 100 digitized "Movies On Demand" (MOD) and "Subscription Video on Demand" (SVOD) services to about half a million digital cable subscribers.

The MOD service is offering recent movie releases for $3.95 and some older films for $1.95. The rentals last 24 hours, and feature VCR-like pause, fast forward and rewind abilities and are available any time, the company said.

"We think the video on demand service will also help drive more customers to sign up for digital cable services," said Time Warner Cable spokesman Mark Harrad. From a business perspective, he said the new service helps the company distinguish itself from competitors such as direct broadcast satellite providers, whose technology doesn't support video on demand services.

Taking advantage of the popularity of its corporate sibling HBO's shows such as "Sex and the City" and "The Sopranos", Time Warner Cable said it would offer past episodes of those programs and others through a subscription video on demand service. The monthly fee of $6.95 includes about 18 past episodes and access to programs in its Cinemax on Demand, Showtime on Demand and The Movie Channel on Demand services.

Time Warner Cable serves about 1.4 million customers in the New York metro region and another 175,000 customers in New Jersey. About half have upgraded to digital cable. The video on demand services are expected to be rolled out to digital customers in Manhattan, Queens and Staten Island within the next two weeks and to the rest of its base by the end of the year.

The number two cable provider, which counts about 12.8 million subscribers overall, is moving aggressively to roll out the new services across its divisions. Out of 34 markets, 28 now feature video on demand digital cable services. It expects to be offering the service in all its national markets by year's end.

Other entertainment concerns in the region have been trying out the new service, such as Broadway Television Network, which distributes Broadway musicals in a variety of formats. The New York-based BTV, which produces and distributes live-in-performance musicals, added VOD to its site last November, in addition to the VHS and DVD formats it offers.

Despite the cash-crunch facing the cable industry as a result of a difficult advertising recession, many players are finding the funds to roll out the service. By most accounts, VOD technology is available to about 25 percent of the nation's 80 million cable subscribers and some 10 million homes are expected to be ready for VOD upgrades by year's end.

The leader in offering the service is Comcast Corp., which will become the nation's largest cable company after it merges with AT&T Broadband. It currently offers VOD services in over three million homes out of its eight million subscribers, according to TVPredictions.com, an industry publication.