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Enron Finds Retail Ally For Software Venture

Despite scrapping its exclusive video-on-demand arrangement with Blockbuster Inc., Enron Broadband Services has again sought allies to drive its overall on-demand entertainment strategy.

This time, Enron Broadband Services Content Systems LLC, a division of Enron Broadband Services, has cut a "long-term" deal with online retailer EBWorld.com Inc. and Into Networks Inc. to offer software-on-demand (SoD) rental services via the Web. The companies declined to divulge the specific financial terms or length of the deal.

What is known, however, is that Into will license its proprietary streaming software to Electronics Boutique, an EBWorld.com parent that operates 740 retail locations. Into will also provide Enron and EBWorld.com with access to its content servers located on local broadband networks and within the larger Internet "cloud."

Enron's role is to furnish Into and EBWorld.com with the financial and operational means for SoD, and to weave its "Intelligent Network" with grids operated by MSOs and digital subscriber line providers, said Enron Broadband Services commercial manager Michael Harris.

"Our goal for this deal is to integrate with Enron's network and take [SoD] to the masses," added Into vice president of marketing Bill Holding.

Electronics Boutique, in turn, will handle the service's marketing and customer-service components and craft SoD deals with title publishers. EBWorld.com plans to launch SoD June 1.

EBWorld.com hopes that software title rentals will drive purchases of boxed products. One option the company is exploring is a 72-hour rental period for $4.99, with part or all of that fee applying to an outright purchase of the title, though other rental terms are being discussed, said EBWorld.com director of businesses development Nathan Solomon.

"We feel that this represents a symbiotic relationship in that the rentals will drive sales, while the prospect of having the rental charge credited will drive additional usage of this new technology," Solomon wrote in an electronic-mail response to questions.

He added that EBWorld.com will focus on "front-line" titles, and doesn't expect to refresh them in large numbers each month.

How the three partners and cable or digital subscriber line providers will divvy up revenues remains unclear. The largest piece of that pie will likely go to the software publisher, Holding said.

"We think there's enough (revenue) there for that model to make sense," he added.

Going forward, Holding said, Into's strategy will center on the licensing of its streaming software.

"In the early days we had to do everything to show people that streaming software was for real," he said, noting the company's server efforts and distribution and licensing agreements with MSOs and software publishers.

"Now we'll focus on our platform and help our partners become successful with it," Holding said.

Cable has a definitive jump on EBWorld's SoD service. Into and its rival, Media Station Inc., have secured deployments with a growing list of service providers and MSOs, including Excite@Home Corp., Road Runner, Cox Communications Inc., AT & T Broadband, Comcast Corp., Time Warner Cable and Sprint Corp, among others.

Enron said it plans to help EBWorld.com and Into establish a presence outside U.S. borders. The company expects to expand its Web retailing partnerships before the end of the second quarter, Harris said.

Though Enron found the quantity and quality of VOD programming in its Blockbuster deal a bit disappointing, the company believes those issues won't affect SoD, Harris said.

Getting publisher buy-in was a prerequisite for piecing together an SoD service, Solomon said, "so we're quite confident that we'll get where we need to be by launch."

Though EBWorld.com is trying to drive shrink-wrapped titles through rentals, Media Station currently is exploring a different model whose aim is to deliver full software titles in a digital and secure format.

MediaStation's "SmartDriver" technology will do just that, said company senior vice president of strategic development Allan McLennan, who said the EB/Enron/Into deal "validates the software-on-demand marketplace."

Introduced last year at the Western Show and designed to complement MediaStation's "SelectPlay" SoD rental model, SmartDriver agreements will emerge within the next 60 days, McLennan said.

The result "will radically change the complexion of the marketplace," he said.