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Curtains for Intertainer?

17 Oct, 2002 By: Holly J. Wagner

Culver City, Calif.-based video-on-demand (VOD) company Intertainer today notified its employees and subscribers the company's Internet VOD site will go dark Wednesday unless it can reach suitable content agreements with major studios.

“As many of you already know, on Sept. 23 we filed a federal antitrust suit against AOL Time Warner, Sony, Universal and Movielink,” said the statement. “On Oct. 23, we plan to take the site down until we can work out a fair business model with the defendants, who control more than 50 percent of the theatrical motion picture business and more than 60 percent of the music business.

“To the 147,000 broadband users who became Intertainer members and to our friends and colleagues in the trade, we appreciate your continued support. We promise to return when there is an environment in which an independent company such as ours is allowed to compete for your business. Whether the current environment of increasing media concentration is good for our Democracy is, of course, the ultimate question.”

The company's federal lawsuit, to which studios and their VOD joint venture Movielink have made no response, alleges the studios bought or traded content for shares of Intertainer, then violated confidentiality agreements to copy its proprietary technology to develop Movielink. Some people who formerly held key positions at Intertainer now work for the studios or Movielink.

"We were incredibly encouraged by the studios to build the technology," Intertainer CEO Jonathan Taplin said. "All three of the companies in the allegations took shares in Intertainer. Warner and Universal, as part of their compensation for content, took shares."

The complaint alleges studios summarily ended content contracts with Intertainer and, once Movielink was announced in August 2001, used contracts giving them a 60 percent revenue split from their own joint venture to set an "industry standard" 60 percent split.

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