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NBC invests in video firm
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August 3, 1998: 2:23 p.m. ET
Broadcaster buys 6 % of Intertainer, a video-on-demand, shopping provider
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NEW YORK (CNNfn) - Continuing to build its interactive businesses, National Broadcasting Co. will acquire 6 percent of Intertainer Inc., a provider of electronic commerce and video-on-demand services, for an undisclosed amount of cash, the General Electric Co. broadcasting subsidiary announced Monday.
The investment underscores the importance the network places on finding additional outlets for its programming and, hence, sources of revenue.
Under terms of the agreement, NBC will form an alliance under which revenue from the video rentals is split with Santa Monica, Calif.-based Intertainer.
For the peacock network, the investment will allow NBC to become one of the first of its peers to offer its television programming on demand. However no broadcaster yet has offered TV programming via the Internet.
"This is not using the Internet," said Jonathan Taplin, co-chairman and co-founder of Intertainer. "The service itself sits on a private virtual network."
Beginning in the third quarter, customers of Comcast Corp. in Willow Grove, Pa., and of U S West Inc. in Denver can access the Intertainer service to subscribe to on-demand programming.
Through a personal computers or set-top boxes, consumers can license the programming for a 24-hour period with all the functionality of a VCR.
NBC programming details still are being finalized and are expected to be unveiled in the fall.
Comcast and U S West own 7.5 percent and 6.5 percent of Intertainer, respectively. Intel Corp. and Sony Corp. each own 4 percent.
NBC, in conjunction with GE Capital's Equity Capital Group, also will have the option to increase that stake in the coming months. NBC also will have one seat on Intertainer's 11-member board.
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