Intertainer closes to save for suit

10 of company's 15 employees cut; subs to lose service

Online movie seller Intertainer said it will shut down next week to conserve resources for its antitrust lawsuit against competitor Movielink and the three studios backing that service.

“We decided it was going to be a long, drawn-out lawsuit and we’d better conserve our resources to fight it,” said Jonathan Taplin, Intertainer’s CEO and chairman.

The move will cost 10 of the company’s remaining 15 employees their jobs, and shuts down the service for 147,000 broadband subscribers. The shutdown takes effect Wednesday, though the company Web site already displays a message from Taplin saying the site has stopped operating until “we can work out a fair business model with the defendants.,” which are AOL Time Warner, Sony, Universal and Movielink.

The company promised “to return when there is an environment in which the independent company such as ours is allowed to compete for your business. Whether the current environment of increasing media concentration is good for our democracy is, of course, the ultimate question.”

The site includes links to Intertainer corporate information and the full antitrust complaint, and links to write letters to the U.S. Attorney General and FCC chairman, but nothing else.

Suit filed in September

Intertainer filed a federal antitrust suit against the studios and Movielink in September, charging they were conspiring to offer far fewer movies, at far less advantageous terms, to Intertainer than to their own service. As a result of those unfair deals, Taplin said, the company was losing 25 to 30¢ on every movie it sold.

Sony was among the company’s early investors and board members, but no longer. The company’s investors now include Microsoft, Intel, Comcast and Thomson Multimedia. It largely sold movies directly on the Net to customers, but also had pass-through deals with Comcast cable systems in New Jersey and Adelphia systems in Cleveland.

The company has raised $120 million since its 1996 founding, and now has enough money left to prosecute the suit for an extended period, Taplin said.

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