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TK's MORNING BUZZ: With a Soft Economy, Will High-Falutin' Plans for Video-on-Demand Be Postponed or Shelved?

27 Sep, 2001 By: Thomas K. Arnold

One other factor playing into video rental's hands these days is that with a soft economy, high-falutin' plans for video-on-demand may be postponed or shelved.

One analyst I spoke with said that while most of the high-profile video-on-demand ventures have capital funding in place, those plans willlikely be "re-examined" should the country sink into a real recession. Thisdoesn't necessarily mean they will be delayed, or halted; but there's always that chance.

The real hit against video-on-demand industry will be with the startups. Just yesterday, the Reuters news service reported that X-10 Wireless Technology Inc. withdrew plans for an initial public offering of 5 million shares of common stock, blaming market conditions.

"As a result of circumstances regarding the securities markets, the registrant has determined at this time not to pursue the initial publicoffering," the company told the U.S. Securities and Exchange Commission.

Reuters pegged the estimated price range for the shares at between $14 and $16 per share.

X-10 Wireless had filed a preliminary prospectus with the Securities and Exchange Commission in August 2000. The company makes broadband wireless products that let users receive and deliver video and audio content and todistribute Internet content from a personal computer to televisions and otherelectronic entertainment devices.

Granted, X-10 isn't even a blip on the radar of video-on-demand watchers, but its IPO withdrawal certainly could be a harbinger of things to come. You can be certain backers of high-profile ventures like MovieFly are keeping a keen eye on what's happening -- and on what's going to happen next.

Comments? Contact TK directly at:TKArnold@aol.com

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