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Enron, Blockbuster Launch VOD Product

The content may be limited, and only a few hundred homes may have digital-subscriber line access to somewhat dated movies like Silence of The Lambs. But Enron Corp. and Blockbuster Inc. did get their VOD service off the ground at the end of December, meeting their promise to launch by the end of 2000.

Having cut deals with local utility companies to deliver the service, Enron and Blockbuster launched the VOD product last month to a total of 300 households in Seattle, Portland, Oregon and New York City.

Though cable operators launching VOD services rely on a single set-top to deliver both digital video and cable, the Blockbuster Entertainment On Demand service requires current cable subscribers to get a second box. Motorola Inc. is supplying its Streamaster set-tops for the project, which also uses nCube Corp. VOD servers.

Trial participants haven't complained about the extra set-top, Blockbuster New Media president Mark Gilman said. "There was absolutely no hesitation with regard to the set-top box," he added.

The companies are charging subscribers $4.99 per movie-a 15- to 20-percent premium on what Blockbuster charges for movies in its video stores, Gilman noted.

One of the biggest challenges has been securing content for the service, Gilman said. Blockbuster has cut deals with Lions Gate, Trimark Pictures, Artisan and MGM for titles like Dances With Wolves, Bull Durham
and Fargo.

But the company still hasn't signed a single major studio.

"The debate is over the revenue splits," Gilman said. Some of the majors, including Sony Pictures and Warner Bros., are reportedly considering launching their own VOD service. That has also hampered Blockbuster's ability to sign those studios, Gilman said.

By the end of the first quarter, Blockbuster expects to have up to 500 movies in its VOD library, Gilman said.

ReFlex Communications provides last-mile connectivity for the service in Seattle and Portland and SwitchPoint Networks is distributing the service in Salt Lake City.

Verizon is offering the DSL product in New York City, where Gilman said the company expected to have up to 100 customers in the trial by the end of December.