NBC continued on its aggressive new media investment spree by agreeing to purchase a stake in Intertainer Inc., a startup online service that provides on-demand entertainment programming to personal computers and cable systems.
NBC and sister company GE Capital agreed to invest $3 million for a 6% stake in the privately held Intertainer. The two companies have options to buy up to 19% of Intertainer for about $75 million in the next 18 months.
The deal marks Intertainer’s first foray into TV programming. The service already has arrangements with every film studio in Hollywood, except Paramount, providing for the delivery of on-demand feature films over cable lines. The NBC deal will allow patrons to choose TV programs on demand as well.
“The NBC deal means another very important partner for us that brings a whole different set of assets to the table,” said Jonathan Taplin, who co-founded and co-created the service with Richard Baskin. “It allows us to do TV on demand, which has never been done before.”
In addition, an NBC representative will join Intertainer’s 11-member board of directors.
Concession to affils
As part of the agreement, NBC will also provide programming it owns to Intertainer. News programs such as “Dateline” might be available soon after they are broadcast, but Intertainer will get only entertainment programs from past seasons, so as not to anger NBC’s affiliate stations.
NBC’s affiliate stations have been pressuring the network for the exclusive rights to NBC’s programs. The stations believe that if NBC’s shows, such as “ER,” air elsewhere, they have less value to the stations.
The fledgling Intertainer will be available to consumers via their PCs or TVs beginning in the third quarter of 1998. Initially, this distribution will be provided via two of its existing partners, Comcast Corp. and US West.