Intertainer, Microsoft launch online film, video service

But that isn't stopping Intertainer Inc., which already provides video-on-demand via cable television, from launching on Wednesday an online film and video service in 35 U.S. markets. Intertainer will provide films through existing partnerships with Universal Studios, DreamWorks SKG, Warner Bros. and other studios and cable television networks. That arrangement makes Intertainer the first nationwide service with access to such a wide variety of mainstream movies. Intertainer and Microsoft, a partner in the venture, say the service is aimed mainly at future users, including college students who typically have access to high-speed broadband networks on campus. Jupiter Media Metrix estimates 41 percent of online households in the U.S. will subscribe to a broadband Internet connection service by 2006 - up from nine percent in 2000. But few mainstream subscribers to broadband Internet service delivered over cable modems or Digital Subscriber Lines have steady access to the kinds of speed needed to deliver VHS-quality video, a major roadblock to any video on demand venture. Intertainer requires subscribers to have a connection of at least 580 Kbps. Most DSL service is in the 256 Kbs range, according to Jupiter. People wanting higher speeds can often get it, but at prices that run about $80 per month. Microsoft, an investor in Intertainer, will begin promoting the new service later this month through cobranded Web pages on its MSN service. Films will become available about 30 to 40 days after they hit video stores. Subscribers will pay $7.99 per month for access to a basic level of programming and must add $3.99 for a 24-hour license to watch new releases and $2.99 for separate library titles. Movies will be streamed using Microsoft's Windows Media Player. Other computer-based video-on-demand services, including competing models planned by a coalition of movie studios, require users to download large files to watch films. Intertainer already serves several cable television markets around the country, providing the ability to pause, rewind and fast-forward through movies, music videos and sports programs. The company serves about 100,000 cable subscribers in six markets.