to get backing from Microsoft
January 24, 2000
$57-Million deal would extend software giant's reach and widen
interactive TV services distribution network.
BYLINE: STANLEY HOLMES, TIMES STAFF WRITER
Microsoft Corp. plans to announce today that it will invest $57
million in Intertainer, a Culver City-based interactive TV service
that's about to launch its video-on-demand business nationwide.
For the Redmond, Wash.-based software giant, the plan is the latest
in a series of alliances to lock up software deals in emerging
high-speed broadband networks that cable and phone companies are
trying to sell.
The Microsoft alliance also would give Intertainer access to a
wider distribution network that Microsoft has developed through
deals with cable giants AT&T Corp., Comcast Corp., Rogers Cable
in Canada and United Pan European Communications in Europe.
Those companies and other Microsoft partners such as NorthPoint
and Rhythm, which offer high-speed phone connections, are adopting
Microsoft's Windows TV software platform into their cable and
digital subscriber line set-top boxes.
Intertainer, launched 3 1/2 years ago, bypasses the Internet to
offer movies, music, television shows, videos, shopping and advertising
directly to the home through the personal computer or TV using
either high-speed telephone or cable connections.
As part of the investment deal, Intertainer will use Microsoft's
TV software to distribute its programming.
Intertainer counts Sony Corp., Intel Corp., Comcast, US West Communications
Inc., Merrill Lynch & Co. and NBC as its prime investors,
and has a library of about 50,000 hours of movie, video and TV
programming that it can offer on demand to home users.
Intertainer has licensing deals with every Hollywood studio except
Paramount Pictures for the rights to show first-run movies when
they are released to pay-per-view distributors.
delivery of entertainment digitally to the home on demand is here
right now," said Jonathan Taplin, co-chief executive of Intertainer.
"We're ready now to roll this out nationally."
It recently completed test marketing of its subscription-based
service in Denver; Boulder, Colo.; New York City; and Willow Grove,
been working for a long time to create the marketplace for enhanced
and interactive TV. This deal fits nicely with our Windows TV
platform," said Jon DeVaan, senior vice president for Microsoft's
Intertainer will begin selling its programming within a month
in Cincinnati and Baltimore, Taplin said, and will add markets
as it reaches agreements with other major cable and phone companies.
Intertainer is betting that Microsoft's alliance with various
cable companies will make it easier to add Intertainer to their
lineups because they will use the same software system, Taplin
Access to broadband distribution is critical to Intertainer. To
offer interactive video content, it needs the power that only
cable modems or DSL lines can provide.
kind of interactivity is very crucial," Taplin said. "We call
it enhanced television. Our notion is that they can be married
into a beautiful and seamless whole."
For Microsoft, the deal is clear-cut. It is about selling software.
"To the degree we can make enhanced TV and the broadband marketplace
possible, consumers will demand more digital set-top boxes that
run our software and demand access to our services," DeVaan said.