Surrounded by his rock 'n' roll past, Jonathan Taplin has
positioned himself in the center of Hollywood's future.
This is, after all, the man who was the tour manager for
Bob Dylan in the 1960s and weathered the outrage from
audiences when the singer plugged in his guitar. He's the guy who
produced a dark, strange film by a promising young director in
1974 — Martin Scorcese's Mean Streets. The same guy who
spearheaded media mergers and monster corporate buyouts
during the "greed is good" heyday of the 1980s.
Now, Taplin, music producer Richard Baskin, and film director
Jeremiah Chechik have created an ambitious company called
Intertainer. They want you to skip the trip to the octoplex and, with
fast Web access (see infographic below), zap the $6 billion movie
industry direct to your PC/TV. The Santa Monica, Calif.-based
company has plans to provide video-on-demand, electronic
shopping, music, and other services to the home over high-speed
telephone lines or cable television devices. "We are the future of
digital entertainment and electronic commerce," says Baskin, 48,
who shares his chairman and chief executive duties with Taplin.
"We'll be a basic service for anyone with a cable modem or ADSL
Sound familiar? It should. Interactive television
has been touted as the "next big thing" for nearly
20 years, but always proved too costly or too
technologically awkward. Taplin insists that the
economics and the technology have changed and
the time is now right. The marriage between the
PC and cable worlds, as well as an industry-wide
push to develop a system based on open architecture, will allow
the startup to create "a full-service interactive programming
network." Intertainer is one of a new breed of company: central
aggregators of entertainment. Businesses like Intertainer don't care
whether the machine used to consume such broadband material is
a PC or a TV — or a combination of the two. Nor do they care if
people get information from a cable modem or a set-top box. The
only thing that matters is content — who's got it, how it's packaged,
and how to make it easy to sell.
Content is where Intertainer shines. The founders have an enviably
fat Rolodex, assembled from their combined 50 years of
experience in California's most fickle town. People return their
calls, a simple fact that can mean a huge advantage to a digital
startup. "If there's one thing Richard and I understand, it's how to
work in this industry," Taplin says.
Billed as the HBO of broadband technology, Intertainer has been
noticed — and financially supported — by many of new media's
biggest players. Electronics giant Sony, telecom heavyweight
USWest Communications, Intel, cable company Comcast, and the
venture capitalists at Sterling Ventures have invested a total of $15
million in the 2-year-old company.
"It's the promise of what they're trying to achieve that has us
excited," says Claude Leglise, vice president of Intel's content
group. "Is the idea new? No. But we noticed Intertainer because
they're actually doing it."
Baskin says another "incredibly large" outside investment will be
made this fall. Officials with the five companies declined to say
how much of the privately held Intertainer they own, but Baskin
says that the company is still controlled by its original founders.
Despite its problems in the
past, the buzz over interactive
television still lives, thanks to a
flurry of alliances between the
cable world and high tech. The
question now nagging these
companies is simple: Will
people pay for
Intertainer's service is not as
simple to use as a VCR,
people simply won't use it,"
Taplin says. "We've figured out
a way to do that, and that keeps video rental executives awake at
It should. After all, Americans spend nearly $7.4 billion each year
renting movies from corner video shops and monster movie hubs
like Blockbuster. And they drop another $7.6 billion annually buying
video tapes. Intertainer believes video-on-demand will feed
consumers' voracious rental habits. The company has licensed
new hits such as As Good As It Gets and classics including
Singing in the Rain from several major Hollywood studios, such as
Sony, MGM, Warner Bros., Universal, and Twentieth Century Fox.
It has also signed agreements to distribute television programming
from PBS and National Geographic and access several
independent cartoon, fashion, and travel-oriented shows.
Intertainer has held two limited technical trials in California, one in
Palo Alto with Pacific Bell and the other in Fullerton with Comcast.
Each trial included a sample set of 100 homes. Intertainer won't
divulge financial details about how the tests went, but Baskin says
the company discovered that the average household ordered three
programs per month.
Those trial launches will continue this fall, when Comcast and
USWest roll out Intertainer in the Philadelphia and Boise, Idaho,
areas. The launch, limited to "a few hundred homes at first," will
expand into other markets by late 1998. Both service companies
will include Intertainer as part of their basic lineup of channels for
customers who pay for cable modem service or a digital
subscriber line. The service will be available both on televisions
and PCs, Taplin says.
At any given time, Intertainer will have about 500 hours of
programming cached on a Unix server and available for playback.
The company plans to rotate about a quarter of the lineup each
Like the Web, Intertainer relies on the ease of point-and-click to
maneuver through its various menus. Two concentric circles on
the splash screen offer users a choice of entertainment and film
genre, ranging from Lawrence of Arabia to concert footage of
Alanis Morissette. Consumers will pay $3.95 for first-run movies
and from $.35 to $1 for an hour of television programming. Pricing
for downloading music and playing video games has not yet been
The Taplin-Baskin friendship goes back more than a decade to the
'80s, when they ran into each other at social functions in
Hollywood. At the time, Baskin was composing movie scores and
was politically active with the Democratic Party. Taplin, having set
up the business meeting in which the Bass brothers bought a
controlling stake in Disney, was handling other large-scale media
mergers at Merrill Lynch. The third founder, Chechik, was directing
such films as National Lampoon's Vacation. (Chechik, a member
of the company's board of directors, is not involved with day-to-day
Framed memorabilia hanging on Intertainer's office walls reinforce
the trio's credibility. Platinum records by Barbra Streisand and
Willie Nelson in the lobby are witness to Baskin's success as a
composer and recording producer. In the back are pictures of stars
chatting with Taplin, a Princeton graduate with mutton chops and a
shaggy 'do who ducked out of English lit class to hang out with
Janis Joplin. His personal favorite is the Richard Avedon portrait of
Taplin and The Band, an autographed candid shot of musicians
and their tour manager munching on sandwiches.
About four years ago, Taplin looked at efforts to screen films on the
Web. Inconsistent quality of the video images — muddy tones,
blurry focus — as well as transmission delays, convinced the
50-year-old entertainment veteran that the Net was a poor movie
house. "It was like watching television in 1948: terrible pictures,
terrible sound," Taplin says. "We had spent our lives working to
make pictures look and sound rich and wonderful. There had to be
a better way to do this than the Internet."
They are not alone in
that belief. Intertainer's
comes from another
startup, DIVA Systems
in Menlo Park, Calif.
DIVA evolved as the
brainchild of founder
and CEO Paul Cook,
based on technology
developed at RCA
Labs during the early
'80s. Launched in
1995, the company
initially rested its future
on a proprietary,
scalable video server
and a line of
set-top-box technology. DIVA has drawn more than $298 million in
private financing rounds.
So far, DIVA has rolled out its service in four markets: Delaware
County, Penn.; the northern areas of Philadelphia; Monmouth
County, N.J.; and the northern suburbs of Atlanta. Plans for
expansion were unveiled in April, when DIVA and General
Instrument announced their intent to work together. By fall, General
Instrument and Scientific-Atlanta will port DIVA's video-on-demand
service on their digital cable set-top boxes.
ntertainer's vision is far greater than that of the typical
video-on-demand startup. One of the company's more
intriguing efforts is its attempt to blur the line between
television programming and ecommerce. Take the fashion
industry, where designer Donna Karan, among others, is allowing
Intertainer to broadcast video footage from her fashion shows.
While you're watching the models at the latest DKNY show slink
down the runway in the season's hottest evening styles, a little
black dress catches your eye, and a tiny shopping icon suddenly
flashes in the corner of the screen. Point the cursor on the model,
click, and the screen jumps to a description of the gown, its price
tag, and an electronic order form.
Your credit card number is already on file with
whatever company is bringing the Intertainer
service into your home. Order the garment —
c'mon, you're worth it — and Bloomingdale's will
ship the dress to you the next day.
Though Donna Karan may be a little highbrow for
the average consumer, Taplin says he envisions
working The Gap and The Limited to grab a
broader audience. Eventually, he adds, Intertainer
will embed such ecommerce hot-links throughout all the television
shows and feature films it broadcasts. A shopping icon appears
onscreen to alert viewers to purchasing possibilities. Do you like
Jennifer Aniston's earrings in a Friends episode? Want to buy a
trench coat just like the one David Duchovny wears on The
X-Files? Taplin sees a day "very soon" when audiences will be able
to just point, click, and buy anything featured on a TV program.
And Intertainer wants a cut of
each transaction. Just what
percentage that will be, though,
is something on which neither
Taplin or Baskin will comment.
Intertainer says it plans to
launch a "major" (no dollar
amount released) marketing
campaign by early next year.
(Right now, Intertainer is mostly
interested in nailing down
distributors, rather than doing
any direct marketing to the
public.) "We need about
700,000 subscribers to meet our break-even point," Baskin says.
"We expect to have 1 million subscribers by 2000." According to
Taplin and Baskin, Intertainer will make a profit in one of three
ways: through interactive advertisements, electronic commerce, or
Those estimates are incredibly ambitious, considering that most
previous video-on-demand projects have struggled to reach the
100,000 mark. DIVA, which has 1,300 subscribers, installs and
finances all of the computer equipment at the cable company's
end. The cable company handles all customer solicitations and
service. DIVA charges the cable operator $5.95 per month for each
interactive customer. "The cable operator decides whether or not
to add that fee to the customer directly," says Alan Bushell, DIVA's
president and chief operating officer. "Like HBO, it could be folded
into the operator's super cable package." Consumers then pay for
individual programs, ranging from $.99 to $3.95 per show.
DIVA's and Intertainer's business models both rely on shared
revenues from video-on-demand sales, advertising, and online
shopping transactions. Video revenues will be divided with the
network provider and the company that owns the content.
Advertising and transaction fees will be shared with the local
Despite new plans, the specter
of the past haunts any
video-on-demand initiative. As
recently as 1995, the telecom
world was promising an
imminent revolution in video
delivery. But the dream was
nearly impossible to realize.
GTE tried and failed in Cerritos,
Calif. So did Time Warner, with
its 500-channel cable service in
Orlando, Fla. Hoping to create
the perfect product for
consumers' insatiable appetite
for electronic entertainment,
Time Warner spent hundreds
of missions of dollars. Set-top
boxes costing thousands of
dollars were handed out to
homeowners for free,
according to company sources.
These devices were then
connected to enormous — and
very expensive — file servers.
Though promising in concept,
the experiment is now widely
regarded as an extremely
One of the most promising
efforts was TELE-TV. Vowing
to become cable television's
worst nightmare, executives
from Bell Atlantic, Nynex, and
Pacific Telesis began recruiting
television programming from
Hollywood's creative community. The high-power venture promised
it would revolutionize the channel-surfing experience by putting
viewers in control of what they watched and when they watched it.
But hopes were quickly dashed by complaints of high installation
costs and technological incompatibility. Today, TELE-TV and a
number of other interactive-video forays have been cut back or
"At least all these trials accomplished one thing: We know what
does and doesn't work," says Richard Green, president and CEO
of Cable Television Laboratories in Louisville, Colo. "They were
expensive lessons for the industry to learn."
Taplin and Baskin insist that the
times they are a-changin'. Key tech
components are now falling into
place. Earlier this year, several
high-profile deals were made that call
on such high-tech giants as Sun
Microsystems and Microsoft to
incorporate PC components into a
new generation of digital set-top
boxes. Carrying a price tag of $400 of
less, these boxes are easier to
produce and will roll into retail outlets
by the end of the year. File servers, which companies like
Intertainer use to route digital programs from a central office to the
customer's home, are also cheaper to build now and much more
powerful than before. All that may still sound expensive for
consumers, but think about it this way: Cable operators routinely
point to $1,000-per-stream as the break-even cost for bringing
such broadband services into the home.
In the move to provide faster Internet service, cable companies are
announcing plans to offer high-speed modem service to the nearly
65 percent of homes in America homes that subscribe to cable TV
service. And thanks to prodding by Intel and Microsoft, the
telephone companies have pushed forward the deployment of
digital subscriber lines, which allow users to access data and video
up to 25 times faster than existing telephone modems can. "Right
now, everyone's trying to establish a leading position in this
[video-on-demand] field," says Geoffrey Roman, executive vice
president of General Instrument. "Who's going to be the leader?
Who knows? Either way, the industry is giving customers more
entertainment options. It's up to the public to say what finally
P.J. HUFFSTUTTER (P.J. Huffstutter@latimes.com) is a
technology reporter with the Los Angeles Times, where she covers
Orange County companies and the blurring line between youth and
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