AFI OPENS SHORTS LIBRARY TO INTERTAINER DIGITAL NET

Intertainer, the movies-on-demand company run by soundtrack producer Richard Baskin and filmmaker Jonathan Taplin, has negotiated an agreement with the American Film Institute that gives Intertainer access to the AFI's library of independent short films and all future product in the genre.

The deal also calls for Intertainer and the AFI to create a co-branded effort at AFIfilm.com. The AFI will supply Intertainer with about 200 hours of content initially and 20-30 additional shorts a year.

Financial details were not disclosed, except that the AFI will receive an equity position in Intertainer.

"We want to help them build a great educational and entertaining Web site," said Baskin, Intertainer's chairman. "Our mission is not to make a bunch of money; it's to support the AFI and give us access to talented young filmmakers."

Intertainer, which has raised $80 million from partners Comcast, Sony, NBC, U S West, Intel and Microsoft, delivers entertainment on-demand via a private digital cable or DSL network.

The company charges $2.99 for a first-run feature film like "The Matrix" and $2 for a library film like "Casablanca." Typically, the studio that owns the content receives at least half of the fees generated from feature films and less for documentaries, with Intertainer getting the remainder. The fee split for the AFI deal has not been finalized, Baskin said.

Fewer than 5,000 consumers use Intertainer, though the company only recently deployed its service. The company expects 200,000 consumers by year's end, "and we'll ramp up quickly from there," Baskin said.

The company has access to 50,000 hours of content from 60 media companies, including all major studios except Paramount. It offers a large selection of films on a rotating basis that consumers may choose on-demand, complete with pause functionality.