For certain broadband customers in Cincinnati and Denver the next step in television delivery is not just around the corner. It's already in their PCs and TVs.
Intertainer, with the help of Akamai and its edge-server network, is now offering broadband subscribers a choice of 500 to 600 hours of movies, music videos, and television programs per week. Akamai is delivering Intertainer's content across its edge-server network where broadband providers can, in turn, offer the content to their subscribers.
Tech-savvy subscribers are, in turn, hooking their PCs up to their TVs with the help of S-video connections or X10 wireless "Entertainment Anywhere" kits, bringing a VHS-quality experience from the desktop to the big screen.
The Intertainer broadband service is currently only available to 500 Zoomtown.com customers (Cincinnati Bell's DSL service) but will be available to all Cincinnati Zoomtown.com customers and Qwest DSL customers in Denver in the next three weeks. Jonathan Taplin, Intertainer president and CEO, says he hopes to have broad distribution in 10 to 20 markets by the end of the year, depending on how quickly a settlement can be reached in the Verizon strike and how quickly Qwest expands beyond the Mile High City.
Customers can access Intertainer's walled-garden of content through an icon on the broadband service home page. Access to the service is free, with the cost of renting a movie for a 24-hour period currently set at $2.95 (other programming, like television re-runs and music video range in cost from a quarter to a dollar).
While the announcement is similar in tone to the Blockbuster/Enron deal a couple of months back, there is one major difference: Intertainer has spent more than three years developing content rights deals with a number of studios. DreamWorks, Warner Bros., Columbia TriStar Television, Disney Channel, ESPN, Sony Music, are all on board, along with others. As a result, customers have the opportunity to rent blockbusters like The Sixth Sense and The Green Mile today. Intertainer claims that it has more than 56,000 hours of content, including movies, music videos, classic TV series like F-Troop and Welcome Back Kotter and other content ranging from PBS and FoodTV to yoga classes.
"Video on demand (VOD), from the point of view of the movie studios, is a wonderful business," adds Taplin. "They have zero cost, they loan me one digital copy, I digitize it, I carry it over the network, pay for promotion, and I pay them $1.95 per view. So the smart studios, like Warner Bros., want to encourage it."
Working with providers
Both companies have existing relationships with DSL companies that they will build on, jointly and individually. Intertainer has deals with, among others, Qwest, Verizon, Northpoint and Rhythms (along with Comcast for delivery through set-top boxes), while Akamai adds U.S. West, Road Runner, and @Home (among others) to the mix.
"Intertainer is working at very high bandwidths, which requires that its content be pushed that much closer to the edge," says Jonathan Seelig, Akamai co-founder and vice president of strategy and corporate development. "So this certainly puts the pressure on us to forge very strong relationships with all the broadband infrastructure players."
Joseph Laszlo, Jupiter broadband and wireless analyst, says building on those relationships will be key. "It's a good deal for both sides, although the one piece that is really missing are new relationships with last-mile providers to actually make Intertainer's service more widely available," he explains.
"It's great that they don't have to manage their own distributed server network anymore, and it's great for Akamai as potential validation, but without closer relationships between, say, Akamai and major DSL providers, it's a service missing consumers."
The combination of Akamai and Intertainer could provide a one-two punch that could make it easier to knock down deals with broadband, cable, and even fixed wireless providers for carriage. "They potentially bring a better value.than Blockbuster and Enron because they have content deals with the studios," adds Laszlo.