Philips to make hard drive for interactive

Philips New Media is serving notice that it will do what it takes to become “a very serious player” in the fast-growing, volatile interactive multimedia business.

Scott Marden, president/CEO of the multimedia and software division of the $ 31 billion Dutch electronics giant, made the promise in a recent interview, despite the disappointing performance to date of Philips’ Compact Disc — interactive, or CD-I, CD-ROM platform.

Marden said Philips is “fully committed” to expanding the software side of its interactive business, focusing on internal growth as well as carefully considered software company acquisitions.

Marden, the 41-year-old Bear Stearns investment banker who took over the revamped Philips unit last summer, is also stressing alliances with other software companies in the form of licensing deals, publishing co-ventures and other joint projects.

In addition, Marden said he’s determined to build up Philips’ CD-ROM distribution network as a “world leader” in the explo-sive consumer retail category.

Marden acknowledges such ambitious plans will require deep pockets, but notes that Philips Electronics executives have made a strategic decision to shift the corporation’s portfolio “from a hardware-based business to a software-based business.”

Most multimedia executives and analysts are downbeat about consumer acceptance of Philips’ CD-I platform. But, Marden countered, “We’re convinced that content will drive the interactive business, and we’ve made a key decision to be on an open platform as a publisher.”

Philips Media will release approximately 75 original CD-ROM titles this year, Marden said, concentrating on interactive games, family-oriented educational programs, and specialty reference titles. About 25% of the titles, Marden says, will feature three-dimensional graphics.

In addition, Philips Media will distribute 15 Paramount films on CD-I this year and is currently negotiating CD-I distribution deals with MGM and Polygram.

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