Under the terms of the agreement, Intertainer will have access to all of Universal's new releases, as well as its full catalog of older films. The movies, along with some TV products, will be available on Intertainer's digital cable system starting this month.
"It's a huge move for them. I don't know anyone who has deals this deep," said Kevin Noonan, an analyst with The Yankee Group. "This puts them in a pretty good position."
Securing rights from the major studios has proven to be the greatest obstacle for companies trying to make inroads in the video-on-demand market. When Blockbuster unveiled its trial video-on-demand program late last year, it had movie rights from just a handful of companies including Artisan, Trimark, Lion's Gate and Metro-Goldwyn-Mayer. At that time, Blockbuster was still attempting to land deals with the major movie houses.
Analysts agree that for video-on-demand to be successful, consumers must have access to the same breadth of movies they do at their local video stores.
Intertainer's deal with Universal gives the company a major boost toward reaching this goal. The Los Angeles-based company also offers movies from Warner Bros., Disney, DreamWorks, Sony, Miramax and 20th Century Fox.
Unlike pay-per-view, which consumers must watch on a scheduled basis, video-on-demand lets people view a movie multiple times at their convenience as well as pause, rewind and fast-forward the service. Movies automatically time out when their "rental" periods end, preventing late fees that often plague people renting videos.
Video-on-demand promises to be a lucrative market once it reaches maturity. The existing pay-per-view market is estimated to be worth some $1.5 billion, according to Jupiter Media Metrix.