High-Speed Internet Entertainment Expands

Beating the Hollywood studios to the punch, Culver City-based Intertainer Inc. is making its entertainment-on-demand service available today to consumers with high-speed Internet connections in the 35 largest U.S. cities.

The move will be backed by technology and marketing muscle from Microsoft Corp., the largest investor in privately held Intertainer. The movies, TV programs and music videos from Intertainer will help Microsoft compete with the audio-video software and programming from RealNetworks Inc., said analyst P.J. McNealy of GartnerG2, a technology research and consulting firm.

Internet-based video services are expected to have limited appeal until a much larger percentage of consumers have high-speed Internet connections to their TV sets. Still, the move into 35 cities will give Intertainer access to more than 10 times as many potential customers as it can reach today, said Jonathan Taplin, Intertainer’s chief executive.

Before today, Intertainer had been available only to about 400,000 people whose cable TV systems or high-speed Internet services had agreed to distribute its programming. Now, the company can reach 5 million to 7 million people in New York, Los Angeles and 33 other metropolitan areas with high-speed connections, Taplin said.

Intertainer isn’t the first to offer movies through the Internet, but it is the first to promise recent releases from several major Hollywood studios. That is what the studios hope to do themselves next year, through a pair of joint ventures, Movielink and Movies.com.

Intertainer lets subscribers watch movies on demand, with a full-screen picture comparable to a VHS tape. Most competitors, including the studios’ service, require viewers to download and store large video files onto their computers before playing them.

The company has deals with five studios--Universal Pictures, Warner Bros., DreamWorks, Artisan Entertainment and New Line--as well as several television and cable networks, record labels and other video programming suppliers. Intertainer expects to line up at least two more movie studios in the coming weeks, Taplin said.

The studio deals typically provide new releases to Intertainer 30 to 45 days after they appear in video stores, the same time they’re available on cable and satellite pay-per-view services, Taplin said. But the deals vary in scope, and Intertainer does not have automatic access to all of the studios’ catalogs.

Microsoft plans to make Intertainer a featured video service on its MSN Entertainment web site, as well as promoting it on WindowsMedia.com. That should provide significant exposure for Intertainer, given that more than 10 million people visit the MSN sites each month, said Will Poole, vice president of the Windows Digital Media Division at Microsoft.

Intertainer’s expansion comes less than a month after Real’s announcement of its RealOne service, an ambitious combination of software and programming. “Real had been ahead of them [Microsoft] on the content deals,” said analyst McNealy, but Microsoft responded with two significant announcements in a week: the Intertainer deployment and free audio Webcasts of National Hockey League games.

Intertainer charges about $8 per month for its basic programming service, plus pay-per-view fees of $2.99 to $3.99 per movie. Real’s basic service costs about $10 per month.