MICROSOFT IN VIDEO-ON-DEMAND DEAL
By TIFFANY KARY
Staff Writer, CNET News.com
update Microsoft and an entertainment broadband company launched
a video-on-demand service Wednesday, leapfrogging efforts by AOL
Time Warner and Hollywood studios to launch extensive online distribution
Culver City, Calif.-based Intertainer is offering 70,000 hours
of content, including films and TV programs, through a video-on-demand
subscription service in the top U.S. broadband markets. The service,
which launched Wednesday at the privately held company's Web site
(www.intertainer.tv), is available in markets including New York, Los Angeles, Chicago,
Boston, San Francisco, Seattle and Washington, D.C.
AOL Time Warner in August said it was forming an Interactive Video
division, a precursor to a video-on-demand service that would meld
parts of its cable and Internet businesses.
Studios in Hollywood also are planning the launch of a Web-based
video-on-demand project. Two groups of studios are backing different
plans, with Walt Disney and News Corp.'s 20th Century Fox team pitted
against Metro-Goldwyn-Mayer, Viacom's Paramount Pictures, Sony Pictures
Entertainment, Vivendi Universal's Universal Studios and Warner
Bros., a unit of AOL Time Warner.
But video-on-demand efforts have had a spotty record. In the past
20 years, cable companies, media conglomerates and even phone companies
have tried to launch services to no avail.
Securing rights from the major studios has been the greatest obstacle
for companies trying to make headway in the video-on-demand market.
When Blockbuster unveiled its trial video-on-demand program late
last year, it had movie rights from just a handful of companies
including Artisan, Trimark, Lion's Gate and MGM. At that time, Blockbuster
was still attempting to land deals with the major movie houses.
Analysts agree that for video-on-demand to be successful, consumers
must have access to the same breadth of movies they do at their
local video stores.
Meanwhile, companies like TiVo, which makes digital video recorders,
are providing similar services through a different technology that
requires consumers to purchase a set-top box.
Intertainer's services will be delivered using Windows Media, which
will provide VCR-like functions, the companies said. Other technology
for the service comes from Broadwing, which provides the tools to
enhance capacity and performance.
Services will be available starting at $7.99 per month once customers
sign up for a preliminary "FirstPass" service. Feature
films can then be purchased on a pay-per-view basis for $3.99. Intertainer
will feature content from a network of partners including Universal
Pictures, Warner Bros., DreamWorks SKG, NBC, A&E Television
Networks and numerous others.
Microsoft said it plans to promote Intertainer later this month
through co-branded Web pages on MSN. The software giant has been
working on video-on-demand technology for a while; last month it
announced a technology dubbed PatchBay in conjunction with online
film service CinemaNow that simplifies the creation of Web-based