WEB VIDEO'S GROWING PAINS AND GAINS

By Leslie Walker

Fresh troops arrive daily on the frontier of Internet video, where pioneers have long toiled trying to create a Web version of TV. Unfortunately, they have produced mostly casualties so far, including mega-flops such as Pseudo.com, DEN, iCast and Entertaindom.

Yet they keep coming, experimenters in search of the magic formula to delight Internet audiences. I've spent more hours than I care to count watching Web videos, wondering what today's webcasters might tell us about the shape of the Internet to come. After watching Dick Van Dyke reruns in which only his voice was recognizable, downloading a supposedly pirated "Spider-Man" that turned out to be a different movie entirely, and seeing black holes appear on my screen when Comcast Corp. repeatedly dropped the video signal traveling through my Internet connection, I came away convinced this would-be mass medium is not ready for the masses.

Yet it grows more interesting by the day, and this year promises to be another crazy, transitional one for Internet video. While middlemen like RealNetworks, Intertainer.com and CinemaNow ramp up efforts to license music and movies from many sources, the big kahunas at Hollywood's eight major studios have formed two consortiums to sell their movies directly online later this year or early next.

More immediately, a controversial start-up service called Icravetvi plans to launch a low-budget Web broadcasting network June 1 using new technology that lets TV networks put their signals directly on the Internet.

"We have a deal with BBC-TV to broadcast their content online," Herbert Becker, chief executive of Icravetvi owner EnterVision Inc., said in a webcam interview from his office in Montreal. "We have signed a contract with John Daily, a producer who owns a video library to give us access to 600 pieces of content, including the 'I Love Lucy' series. We will have a lot of other broadcasts available at launch."

An earlier incarnation by one of Becker's associates was shut down last year by angry TV stations, and the legal status of the new venture remains unclear.

Other start-ups trying to license Hollywood content and resell it online fret that the studios show little willingness to offer quality content to the emerging middlemen. But Hollywood denies any intent to discriminate.

"Each of our licenses will be non-exclusive to us," says Corey Weiss, director of marketing for MovieLink, a joint venture by Warner Brothers Studio, MGM, Paramount, Sony and Universal. "We have structured this venture to eliminate any possibility of creating anti-competitive terms. We don't determine the prices or the release windows; each studio does that individually."

Weiss says MovieLink is on track to launch before the end of the year, initially as a pay-per-view site for downloading movies to be watched offline.

Hollywood insists its delay in licensing movies online is not about shutting out competitors but protecting itself from pirates who would freely exchange digital copies of Hollywood movies and TV shows online, in violation of copyright laws.

Of all the Internet's multimedia wannabes, one that may have decent odds of survival is RealNetworks, the Seattle company that in 1995 pioneered the Web's first method of transmitting sound in real time. It and Microsoft Corp. are in a fierce fight for market leadership (is there really a market?) in the software that "streams" audio and video, a technique that lets you start listening or viewing files before they finish downloading to your computer.

RealNetworks claims it has 600,000 paying members for the souped-up entertainment subscription service it launched five months ago on a business model that mimics cable TV. People pay $10 to $20 a month for access to the RealOne service, which includes a tiered assortment of live and pre-recorded music, sports, news and entertainment. While it doesn't have feature-length movies, RealOne offers news and sports fare from TV networks and gives the networks a cut of its subscription and ad revenue.

Basic subscribers can replay ABC's "World News Tonight" and "Nightline" shortly after they aired on TV. I particularly like CNN's daily condensed news summary called "QuickCast," which CNN specially records for the Web. There is premium content, too, such as access to condensed videos of 35 major-league baseball games a week for $4.95 monthly. Or you can listen to audio of NASCAR races, major-league baseball and National Basketball Association games, and see video highlights of some.

"On the Web today what most people look at is a relatively short form of content," says RealNetworks founder and chief executive Rob Glaser. "The average people watch on our service is 10 minutes. Broadband users watch a little longer -- 12 or 15 minutes -- while narrowband usage is more like five minutes."

Overall, though, I didn't find RealOne's programming compelling enough to compensate for its warts. The big one is its software, a special media player you have to download; it quickly becomes a nuisance on your computer, constantly popping up messages and ads. Moreover, the RealOne menu design is chaotic and not intuitive to use.

I preferred the interface at Intertainer.com, which relies on an equally annoying media player from Microsoft. There I watched free trailers for "Shrek," "Rock Star" and other movies; to watch the full, feature-length films cost $4 beyond Intertainer's monthly subscription fees of $4 to $8. Intertainer, like CinemaNow.com and a few other sites, has licensed an assortment of movies and TV shows to rent to people online through monthly subscription fees and pay-per-vew streaming.

Intertainer offers biographies from the A&E Channel and specials from Discovery and PBS, but its TV fare feels old. "The Loretta Young Show" and "Dick Tracy" are highlights. Still, I enjoyed its learning channel with videos about food, wine, travel, fashion and health. Kids might love its wacky cartoon characters that teach chemistry, English and other basics.

There are many other contenders. Yahoo offers music videos, classic TV shows and movie trailers on its Broadcast and Launch channels. AtomFilms.com offers original Web videos, mostly super-shorts lasting a few minutes. AtomFilms got a credibility boost from cable TV this month when the Sci Fi Channel hosted a fan awards special that showed original videos "Star Wars" fans had created and posted on AtomFilms.com.

Intertainer chief executive Jonathan Taplin thinks we are on the cusp of a cyclical cultural transition that he has seen before, back in 1964 when he was road manager for Bob Dylan as the musician was ushering in a folk backlash against corporate pop icons like Fabian.

Taplin says the Internet's inexpensive digital distribution system will soon allow more authentic music to break through once again, loosening the marketing stranglehold that big media companies use to make mega-hits out of Britney Spears and "Star Wars" sequels.

"You go through stages where corporate culture ends up buying out everybody and then it gets very manufactured, like it is today," said Taplin. "Then you find new means of distribution, and to me broadband Internet is a radical new means of distribution. It's cheap, it's a sea change, and it empowers artists."