Comcast, Intel back launch of interactive broadband pioneer
New Media Strategist - The International Newsletter of Entertainment
Technologies and Markets
February 27, 1998
A new entertainment startup, called Intertainer, has launched the
first on-demand programming service aimed at the interactive
broadband networks, such as ADSL and cable modem. These are
being built to homes nationwide by telcos and cable companies.
The new service signals the beginning of a new medium for delivery
of entertainment, information and interactive services to home PCs. It
uses broadband networks that can carry full-motion, high quality
Intertainer has also signed a distribution deal with US West. The
telco will deploy the service on its ADSL services, as it intends to roll
out the service to as many as 40 cities in the next year. It will also be
offered through Comcast's cable modem systems, as they are
Backed by Intel and Comcast, Intertainer has assembled a
complete package that includes programming, network management,
settop technology and interface designs.
The Intertainer video-on-demand program package has movies
from major studios Sony, MGM, Warner Bros., Universal and
Twentieth Century Fox. It also has TV programming from National
Geographic, PBS and a number of cable channels. Other offerings
are cartoons, fashion shows, and a travel site by American Express
that incorporates extensive video and a number of e-commerce
Intertainer is now in two beta tests. The first began November 1997
on Pacific Bell's Fast Track ADSL system, through three central
offices in Northern California. The other will begin in February on
Comcast's cable modem system in Buena Park, CA.
At any time the service will have available for playback 500 hours of
programming cached on UNIX servers, and will change about
one-quarter of the programming mix each month.
Consumers will pay $3.95 for first-run movies in the pay-per-view
window, and from $1.95 - $2.95 for library films. Hour-long TV shows
will be $1 and kids' programming 50 cents.
The business model for the service is to share revenues from
on-demand sales, advertising and transactions with the network
provider and the content owner. VOD will be split with both, while
advertising and transaction revenues will be split with the local
With both cable and telco (ADSL) systems we are using what I would
describe as the basic cable model, said Intertainer co-chairman
Jonathan Taplin. "They are charging consumers $40-50 per month for
broadband cable (cable modem) or ADSL. If you get that service, you
get our service for free. We are charging them [cable or telco
operations] a per-month per-person fee that is fairly low."
Consumers already paying $39.95 or $49.95 for cable modem or
ADSL services will not pay a monthly fee for Intertainer. Network
operators will pay a small fee for each subscriber, but that is likely to
be offset by VOD shares.
The service will use intelligent agent software by Firefly to monitor
customer preferences and suggest programming. Each family
member can have a sign-in ID. Advertising will be delivered based on
the demographics of the user and past programming preferences.
Intertainer enters the interactive broadband market with almost no
competition, except from the cable modem packagers, such as
@Home, MediaOne Express and Road Runner, but those companies
offer mostly information services in addition to Internet access.
Intertainer is focused squarely on on-demand video entertainment.
Discovery Channel's Your Choice TV, originally aimed at the digital
cable market, is a time-shifting service for current TV shows. It could
migrate to an on-demand environment - although Discovery had not
announced plans to do so.
"We see them [@Home, etc.] as complementary," says Intertainer
co-chairman Jonathan Taplin. "They are doing Internet access and
short bursts of two-inch by two-inch windows of video, but we are
doing a full video service. They are complementary products because
we are both trying to drive broadband penetration."
Taplin and co-founder Richard Baskin have extensive experience in
entertainment programming, Taplin as a tour manage for Bob Dylan
and producer of the movie Mean Streets, as well as in mergers and
acquisitions for Merrill Lynch Capital. Baskin is the producer of the
score of Nashville and has worked as a composer and producer in
the music industry.
To receive the service, home users will need a PC, Pentium 90 or
above. Programming will be delivered in MPEG 1, which the PC will
decode and display at sub-broadcast quality. An MPEG 1 decoder
card can be installed in the PC at the same time that the service is
Eventually the service will migrate to a standard settop box, rather
than one of its own design. "We want to be the navigator or client
server of choice for all sorts of settop boxes," says Taplin. "When the
Open Cable standard (the digital settop standard in development by
the cable industry) settles in, we'll be in the center of it."
The company expects to migrate to the settop quickly and for that
reason has written the applications on the box in Java for portability.
Among those applications is a simple search engine to find titles or
actors in the movie offerings and an intelligent agent that will make
programming suggestions, and an e-commerce ordering application.
For telco ADSL systems, they will also include e-mail service.
Having applications written in Java also assures easy portability to
European settop platforms. Taplin said the company is already in
talks with France Telecom, Deutsche Telekom and BT about its
program packages and settop applications. It may also be featured in
Stream, Telecom Italia's broadband cable service.
Intel is working with Intertainer to deliver the service to "settop
computers" and will help it optimize the service for Intel architecture
servers. It will also add video conferencing capability to the system.
Comcast will work with Intertainer on broadband PC and settop box
applications, and may also provide programming from its E!
Entertainment Television network.
Intel's undisclosed investment in Intertainer is highly strategic for the
chip maker's ambitions to be a player in the TV settop market. As yet,
no major settop designer or maker has incorporated Intel processors
in a settop box design. In mid-February, just after the Intertainer
announcement, Nokia, one of Europe's leading settop makers,
announced a design using a rival processor.
If traditional Intel designs are not incorporated in emerging standards,
such as Open Cable, the chip maker can still use its Intertainer
experience as a base to develop new products.
Comcast is upgrading its network and deploying cable modem
services. An investment in a program packager would give it
preferred access to the kind of new programming that many believe
is necessary to develop public interest in cable modem. If the new
service succeeds, it would also bring in additional revenue.
Intertainer does not include any Internet services. Most broadband
proponents believe that Internet services appeal to a smaller segment
of viewers than VOD programming generally, and high-speed Internet
access alone is not enough to encourage the average consumer to
part with $40-50 a month.