Recent developments in networking technologies, coupled with the advent of high-capacity storage devices and improved coding schemes, will make it feasible to provide many advanced multimedia communications services. Among future telecommunication services, the VOD (Video On Demand) service is emerging as one of the most promising services. In this paper, we propose a new VOD service scheme that utilizes the dynamic multicasting capabilities of future networks. We first describe an overall VOD service architecture that consists of CPEs (Customer Premise Equipments), SCCs (Service Control Centers), and ISs (Information Stores). Based on the assumptions that each subscriber has local storage space and the video transfer speed is faster than the playback speed, we develop a new service scheme where video signals are multicasted to multiple subscribers simultaneously. To realize the potential benefits of multicasting, we propose two scheduling algorithms: EDS (Earliest Deadline Scheduling) and MMS (Most Multicasting Scheduling). Finally, we study the performance of multicasting scheme and compare the performance of the two scheduling algorithms via computer simulation. The simulation results show that multicasting increases the service capacity of an SCC significantly.