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INTERACTIVE NET'S LATEST HEADACHE SEALEY DEPARTS, BUT STILL WANTS TO BE A NEW-MEDIA PLAYER

By Published on .

Peter Sealey's abrupt departure from Interactive Network capped a frustrating nine-month tenure at the financially strapped company's helm.

Mr. Sealey, the former global marketing chief at Coca-Cola Co., resigned as president-chief operating officer of Interactive Network last week after the company postponed its national rollout from September until mid-1995. Citing his frustration with repeated delays in getting the play-along interactive TV service off the ground, Mr. Sealey said he chose to leave rather than wait until IN retrenches to integrate its technology into cable set-top boxes instead of handheld units.

"The board is going to slow up the expansion," Mr. Sealey said. "I was brought in to take it national."

Mr. Sealey led the drive to market the IN service via subscriptions rather than retail sales and oversaw an advertiser consortium that included Chrysler Corp. and American Airlines. But his marketing style conflicted with the vision of Chairman-CEO David Lockton, who recruited Mr. Sealey.

"Pete's quite anxious to preside over a nationwide branding-oriented marketing campaign," Mr. Lockton said of Mr. Sealey. "We've got an agenda now that allows us to be incorporated into other people's hardware and to more vertically market the product ... something he's never done before and doesn't have a lot of interest in."

Mr. Lockton will reassume Mr. Sealey's duties.

IN has continued to struggle financially in recent months, coming close to going out of business before securing $46 million in additional financing last month from new investors Motorola and Sprint and partners Tele-Communications Inc. and NBC.

As a result of the delayed rollout, the company cut its staff by 17% to 193 people. IN has just 5,000 subscribers in three markets.

For IN, going from a standalone unit to a technology incorporated within set-top boxes is a smart move, but still highly risky, said Tarun Chandra, technology analyst with Laidlaw Equities, New York.

"When you depend on [cable companies] you basically let someone else control your destiny," Mr. Chandra said. "It's a good move, but at the same time they have to be aware of the risk that cable companies might not be as aggressive as IN would want them to be."

And at least one investor wonders how IN will market its service without Mr. Sealey.

"That is one of my questions as we go into the next board meeting," said Tom Weigman, president of multimedia and strategic services at Sprint. IN's challenge is not technology, but marketing, he said.

Mr. Sealey said he's still intrigued by the potential for interactive entertainment, but now thinks that potential will be realized more fully on the computer than the TV.

"It's not black & white, but I think primarily interactivity will take place on the computer screen," he said. "The wiring of America with networked PCs is going to profoundly change our society, just as cable television, just as network television, just as telephones historically have."

Citing huge growth in the CD-ROM market and falling computer hardware prices, he predicted an "explosion" in consumer use of computer-based interactive services.

A former president of marketing and distribution at Columbia Pictures, Mr. Sealey said he'd like to return to the entertainment industry and is discussing a job with a major studio that would combine his interests in new media and film and TV production. For the time being, he is consulting with Digital Pictures, a San Mateo, Calif., software company.

Mr. Sealey compared his exit from IN to the recent departure of Crystal Dynamics President-CEO Strauss Zelnick, another former entertainment executive. Mr. Zelnick was named president-CEO of BMG Entertainment's North American arm.

"He said he really wanted to play in a bigger field, and the [BMG] job offered him that. I think probably my thinking is on the same lines."

Bradley Johnson contributed to this story.

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