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On-demand services headed to set-tops

Intertainer and General Instrument are working to bring Java-based video and music on-demand services to set-top boxes due to appear later this year.

Intertainer and General Instrument, the largest U.S. supplier of cable set-top boxes, are working to bring Java-based video and music "on-demand" services to digital set-top boxes due to appear later this year.

Intertainer said that it will make its Java-based application available for use on General Instrument's next-generation set-top, called the DCT-5000, which is currently slated for release in mid-1999.

By developing applications for the GI boxes, cable companies could roll out "entertainment on demand," e-commerce, and targeted advertising services over broadband networks through Intertainer. The company also provides technology such as the user interface, network management, and other set-top technology that the cable operators need to set up new revenue enhancing services.

"The combined expertise of Intertainer and General Instrument will allow cable operators to increase revenues by offering value-added enhanced services," said Jonathan Taplin, Intertainer's cofounder and co-chief executive officer, said in a statement.

Cable operators have long looked to digital services such as video on demand to boost their bottom line as they square up against the growing power of satellite providers such as DirecTV. The rollout of such services would come none too soon, according to analysts.

Cable operators saw a modest 5 percent increase in monthly revenue per subscriber from 1997 to June 1998 while operating expenses grew 7 percent in the same period, according to a report this month from research firm Strategis Group.

Intertainer, a company with a well-pedigreed group of backers such as Comcast, Intel, and Sony, is hoping to become the preferred provider of advanced services to cable heavyweights.

Comcast would be a logical and powerful ally, given its just announced acquisition of the MediaOne Group for $60 billion in a deal that would create the third-largest cable company in the United States, with 18.4 million homes passed by its network. Intertainer is already working to make its service available on set-tops from Scientific-Atlanta, the second-largest set-top manufacturer.

However, the company faces stiff competition, even considering its backers and alliances.

Microsoft, which has invested $1 billion in Comcast, has a competing service offering for cable boxes that deploys the Windows CE operating system through its WebTV unit to go up against Intertainer's Java-based service.

Intertainer did not state when its service would be ready for deployment on the GI set-top.