Audio Video News

Blockbuster has seen the future, and it ain't video rentals—at least not the kind you pick up in person. The video chain has signed an agreement with Enron Broadband Services to begin offering video-on-demand, one of a host of entertainment services to be developed as part of a 20-year pact. The announcement was made July 19.

Enron Broadband Services, a subsidiary of energy company Enron Corporation, operates a global information and entertainment operation called the Enron Intelligence Network. Blockbuster, a unit of entertainment and communications conglomerate Viacom Inc., is the world's largest video rental business. The agreement between the two will leverage Blockbuster's expertise and deep movie catalog with Enron's distribution network. The result, according to a joint press release: "a global, end-to-end solution that can effectively deliver a wide variety of secure, on-demand entertainment."

Blockbuster is working every angle to ensure its survival in the dawning age of high-speed, wide-bandwidth communication. Earlier this year the company signed a mutual-aid pact with direct-satellite broadcaster DirecTV, in which the two seeming competitors would promote each other's services. "These agreements give first-mover advantage to the involved companies that should enable each of us to capture a significant share of what industry experts project will be a multi-billion-dollar annual business," said Blockbuster CEO John Antioco. "It's the ultimate 'bricks, clicks, and flicks' strategy."

Terms of the agreement have Blockbuster providing content and marketing through its customer base of 65 million households. Blockbuster will also sell Enron's digital subscriber line (DSL) service through its network of stores.

Blockbuster and Enron intend to debut the entertainment-on-demand service in several US cities by the end of this year, and will begin expanding into the international market in 2001. Distributors who have already committed to participate in the first video-on-demand offerings include SBC Communications Inc., Verizon (a new company formed by the merger of Bell Atlantic and GTE), Qwest, and Covad Communications. A "secure infrastructure" for the new entertainment system is being developed by two companies, Telus and ReFlex.

The new service will allow consumers to select what they want to watch from an extensive list of movies displayed on their TV screens, similar to cable TV and satellite program listings. On-demand video will be offered in what the partners are describing as "VHS quality or better with VCR-like control (pause, rewind, stop)." The service will be expanded to other entertainment choices, including games and Internet services, which can be accessed either through the television or the PC.

"Entertainment on demand is perhaps the most visible example of the power of Enron's broadband applications," said Enron Corp. chairman Kenneth L. Lay. "With Blockbuster's extensive customer base and content, and Enron's network delivery application and the capabilities of the distribution providers, we have put together the 'killer app' for the entertainment industry."