Created 09/24/2002 - 23:00
Intertainer, an online broadband entertainment-on-demand site has filed an anti-trust suit against three major entertainment companies, AOL Time Warner, Vivendi Universal and Sony. Intertainer has accused the companies of conspiracy to fix prices in the digital distribution of entertainment. Intertainer's suit alleges that the three defendants have attempted to control the marketplace for entertainment content on demand, thereby hindering and delaying the emergence of the broadband content industry and Intertainer's video on demand services. Intertainer maintains that the defendants have deliberately caused the delay so that they may have the opportunity to deploy their own video on demand site called Movielink, owned in material part by the named defendants and other studios, that would monopolize the Internet video on demand market. Among other accusations, the suit claims that AOL Time Warner induced its subsidiaries, Warner Bros. and New Line, to terminate existing Intertainer agreements in order to impede delivery of a broadband VOD service through AOL rival Microsoft Network (MSN), and that Sony used its position as an investor with Intertainer to compile knowledge of Intertainer's business plans, architecture and proprietary technology and induced former Intertainer employees to violate their confidential knowledge of Intertainer's proprietary technology in order to help build Movielink. "Over the last six years, Intertainer has committed itself to providing technology that is unrivaled in the industry. Given the intense race to provide VOD services to consumers, our business is apt to be crippled by these delays and the inability to provide the breadth of programming selections our customers expect," said Jonathan Taplin, CEO of Intertainer. "At the same time, we have done everything possible to play within the rules by negotiating with the studios in good faith, paying them millions of dollars in advances for content that was never delivered, while assuring our partners that their content will not be misused. All along, we have sought to forge relationships with the studios that are beneficial to all parties. Only when they realized how much time, energy, money and know-how needed to go into a venture that could truly compete with Intertainer did the studios named in our suit begin treating usand, by association, our customersin an unfair manner." Taplin also said that all three defendants attempted to release themselves from agreements by claiming that Intertainer's security was flawed. Intertainer is currently available nationwide to consumers with connection speeds of 500kbps or higher. Comcast Cable and Adelphia Communications also distribute Intertainer to digital cable television customers in select markets.