Intertainer Shuts Down -- Whither VOD? - DigitalCoast Reporter
By: Ben Fritz
Intertainer, the dominant player in the Internet video-on-demand (VOD) space, has shut its doors, most likely for good. CEO Jonathan Taplin says Intertainer is no longer able to operate due to alleged price fixing and unfair competition by the major studios that provide its content. Last month, Intertainer filed a lawsuit against AOL Time Warner, Sony, Vivendi Universal, and MovieLink, the online VOD joint venture the three are planning to launch along with MGM and Paramount. Taplin accused the studios of engaging in unfair practices to undermine Intertainer as soon as they decided to band together to form MovieLink.
With MovieLink still facing an anti-trust investigation by the Department of Justice (DOJ) and waiting to launch, the remaining players in the VOD space are CinemaNow, which offers a small selection of content from major studios along with independent films, and MovieFlix, which has mostly public domain films and an increasing number of independent movies.
Both companies said they are in negotiations with major studios to add their content and, whether out of a desire to stay on Hollywood's good side or a genuinely different experience than Intertainer claims to have had, said their dealings with the studios have been slow, but fair.
Robert Moskovits, COO of L.A.-headquartered MovieFlix, was harsh in his analysis of Intertainer's downfall, accusing it of being another dot-com that failed due to too much VC money and optimism about the space's growth.
"They were shooting for the stars, but this space is just a primordial soup now and there are no stars to be had," he stated. "Going through over $100 million in this business is just criminal. We've done this for half a million of our own money and while we're much smaller than Intertainer, we're still around."
Both CinemaNow and MovieFlix offer monthly subscriptions to view their premium content, priced at $9.95 and $5.95 respectively.
Moskovits said MovieFlix currently has 6,300 monthly paying members and projects it will have 10,000 by the end of Q1 2003. MovieFlix, which is run by Moskovits and a partner, is currently cash flow positive, while CinemaNow, which has major investors such as Microsoft and is majority owned by independent studio Lions Gate, is shooting for profitability in the first quarter of 2004.
Both companies expressed optimism that the launch of MovieLink will bring increased attention to the VOD space, increasing their own opportunities as purveyors of more niche content.
October 18, 2002 - DigitalCoast Reporter
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