The value of NBC's share is estimated at $3 million; the network has an option to increase its stake to 19%-valued at $75 million based on NBC's projection of what the company will be worth by February 2000-within the next 18 months. Should NBC exercise that option, it would become the largest outside investor in Intertainer, a PC- and TV-delivered service aiming to be a player in the pending digital revolution and the convergence of computer, telephone and TV.
The NBC deal is non-exclusive, so Intertainer could do similar deals with other broadcast networks.
NBC, which also will get a seat on Intertainer's board, joins Walt Disney Co., Sony Corp. and Time Warner as program suppliers to Intertainer, and Intel Corp. and Sony as outside investors. Comcast, U S West and the company's three founders own the majority of Intertainer, which pinpoints ad messages to its users via a personal profile.
ENTERTAINMENT AND NEWS
NBC will provide programming to the service, although it would be restricted to the shows it owns. That would encompass news, including NBC's "Dateline" franchise; prime-time cop drama "Homicide" and late-night fare like "The Tonight Show With Jay Leno."
It hasn't been determined if ads contained in the broadcast airings of those shows will remain there when they are given to Intertainer. Intertainer uses the technology of Firefly Networks to create an "intelligent agent" that reads users' programming and product preferences. Combined with volunteered personal data, Intertainer can create a profile on each user.
Advertising is sold and disseminated accordingly. A spot for Airwalk, for example, pops up only to 12-to-24-year-old users with interests in music, fashion and extreme sports. TV spots from these advertisers have been overlaid with interactive technology, so viewers can click on the spots and get more information or make a purchase.
TV spots pop up before or after programming selections, or every 5 minutes while grazing through the service. The pricing structure for advertisers will be determined during the next few months.
LAUNCHING THIS MONTH
Intertainer launches later this month in Willow Grove, Pa., a suburb of Philadelphia, through Comcast. Denver will come on line in the fourth quarter, via U S West.
Two more markets will be added by yearend, "two major media markets, two markets very friendly to the ad community," said Jonathan Taplin, co-chairman and co-founder of Intertainer. The company aspires to add one market per month, beginning in January.
Mr. Taplin said Intertainer doesn't plan on advertising this year. Like the growth of the direct satellite business, Mr. Taplin believes Intertainer will grow as people sample the service at participating consumer electronics and computer retailers.