COMPANIES SELL DOWNLOADABLE VIDEOS-ON-DEMAND

By Jefferson Graham, USA TODAY

LOS ANGELES — Jonathan Taplin decided to stop waiting for broadband to happen. As far as he's concerned, it's finally arrived.

The CEO of Intertainer, a company formed in 1998 to sell video-on-demand (VOD) movies to Internet and TV users, he's been working with cable operators and Internet providers to make Intertainer available to their subscribers in selected cities, including Cincinnati, Seattle and Salt Lake City.

In October, Taplin went quasinational, making recent films such as The Mexican, Miss Congeniality and 15 Minutes available for $3.99 a pop to anyone in the top 35 markets with a connection over 600K, regardless of what ISP or cable operator they use.

The numbers from research firm Jupiter Media Metrix may say that less than 10% of the nation is wired for broadband, but Taplin thinks that's not the whole story. "We realized that 70% of all broadband subscribers are in those 35 cities," he says. "And between broadband in the home and college dorm rooms, that's almost 20 million people, a sizable universe."

What changed for Taplin in 2001 was the renewed interest of Microsoft (which co-owns Intertainer with Sony, NBC and Intel). To accompany the release of its Windows XP operating system, Microsoft has made it a high priority to push broadband with its MSN Broadband service.

High-speed MSN, working with Qwest, Verizon, SBC and Southwestern Bell, is available in 45 markets; by spring, it will reach 90% of DSL-capable homes, says MSN product manager Lisa Gurry.

Most of MSN's 7 million subscribers are slow-speed dial-up, "but we think now that we have a national offering and a great special offer (modem, activation and first 2 months access free) the interest in signing up will increase dramatically," Gurry says.

With XP "optimized" for broadband content, she says, it's obviously in Microsoft's interest to get as many users as possible with high-speed access.

For years, there has been talk of all sorts of big-ticket entertainment offerings on the Web, made available when more people had broadband. To date, most of the Hollywood studios have been dragging their heels. But like Intertainer, Sony Pictures Entertainment also decided this year that the current broadband numbers were enough to get started.

It recently launched Sony Screenblast, which encourages users to view entertainment by the likes of actor Seth Green and musician Billy Corrigan, and to make and share videos, enhanced with outtakes from the Sony Pictures Entertainment library.

The other studios have held off because "not everybody likes to be first," says Michael Skoletsky, head of consulting firm Viant's entertainment and media division. "Some take comfort in being second or third, and those slots are open. As people begin to be able to justify a business model, the revenue will naturally follow."

He cites a recent Nielsen study showing that 56% of office workers watched streaming media in September. "That's a tremendous amount of usage and makes it clear that millions of people have a thirst for rich media entertainment."

Of the major studios, besides Sony, Vivendi Universal owns or co-owns many music sites, including Get Music, MP3.com and eMusic. It's also partnering with Sony in Pressplay, a paid music subscription service scheduled to launch by the end of the year.

Disney, which had big Internet ambitions with its Go portal (now scaled back to a small directory) is partnering with 20th Century Fox on Movies.com, one of two planned VOD services set for next year. Sony, Paramount, MGM, Universal and Warner Bros. are behind another, unnamed company.

For those who don't feel like waiting for the big studios, Intertainer may have the best-known titles, but it isn't the only company offering VOD films today. SightSound offers $2.99 and $3.99 downloads (which can take more than an hour but have higher quality than "streams") that expire after 2 days. Films include Whipped with Amanda Peet. CinemaNow offers downloads and streams of such features as Leprechaun, with Jennifer Aniston, and Alwaysi has mostly streamed shorts and independent films.