UNIVERSAL TAPS INTERTAINER TO STREAM MOVIES

By Cecily Barnes

Leaping ahead of its competitors in the video-on-demand market,Intertainer unveiled a partnership Wednesday with Universal StudiosPay-Per-View.

Under the terms of the agreement, Intertainer will have access to all ofUniversal's new releases, as well as its full catalog of older films. Themovies, along with some TV products, will be available on Intertainer'sdigital cable system starting this month.

"It's a huge move for them. I don't know anyone who has deals this deep,"said Kevin Noonan, an analyst with The Yankee Group. "This puts them in apretty good position."

Securing rights from the major studios has proven to be the greatestobstacle for companies trying to make inroads in the video-on-demandmarket. When Blockbuster unveiled its trial video-on-demandprogram late last year, it had movie rights from just a handful ofcompanies including Artisan, Trimark, Lion's Gate and Metro-Goldwyn-Mayer.At that time, Blockbuster was still attempting to land deals with the majormovie houses.

Analysts agree that for video-on-demand to be successful, consumers musthave access to the same breadth of movies they do at their local videostores.

Intertainer's deal with Universal gives the company a major boost towardreaching this goal. The Los Angeles-based company also offers movies fromWarner Bros., Disney, DreamWorks, Sony, Miramax and 20th Century Fox.

Unlike pay-per-view, which consumers must watch on a scheduled basis,video-on-demand lets people view a movie multiple times at theirconvenience as well as pause, rewind and fast-forward the service. Moviesautomatically time out when their "rental" periods end, preventing latefees that often plague people renting videos.

Video-on-demand promises to be a lucrative market once it reaches maturity.The existing pay-per-view market is estimated to be worth some $1.5billion, according to Jupiter Media Metrix.