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THE FUSE: Time Warner’s Digital Media fund, HSX gets $$$, Microsoft enters PVR market, and the open

THE FUSE: Time Warner's Digital Media fund, HSX gets $$$, Microsoft enters PVR market, and the open

THE FUSE: Time Warner's Digital Media fund, HSX gets $$$, Microsoft enters PVR market, and the open cable battle continues

by Tim LaTorre/EB Insider

>> Just What We Wanted for XMAS: A $500 Million Digital Media Fund!

(indieWIRE/12.20.99) — The digital media world just got a great new holiday
gift from media conglomerate Time Warner with the formation of the $500
million Time Warner Digital Media investment fund. The new fund, consisting
of about $250 million in cash and $250 million in the form of promotional
time and space from various Time Warner cable TV networks, magazines, and
other outlets, will concentrate on non-controlling equity stakes in
companies engaged in e-commerce, vertical and interactive content,
technology, infrastructure and other digital-media related activities. The
fund’s average investment will be in the range of $5 million to $20 million,
but both larger and smaller investments will be considered. In announcing
the fund’s formation, Howard Bressler, chairman and CEO of Time Warner
Digital Media, commented, “As we continue to invest in our own digital media
businesses, there are increasing opportunities to enhance and complement
those efforts through strategic equity investments in other digital media
enterprises. With the formation of this investment fund, we are adding a
new degree of efficiency and strategic direction by taking a coordinated,
portfolio approach to our digital media investments”. The company is
currently putting together a team of professionals who will manage the fund.
[EB Insider]

>> Hollywood Stock Exchange Gets Benjamin$

(indieWIRE/12.20.99) — Continuing the financing theme from last week’s EB
(which reported new investment rounds for short film companies Atom
and Eveo Inc.), Santa Monica’s Hollywood Stock Exchange (HSX)
announced this week that it has secured $23 million in financing from the
Travelers Insurance Company and XL Ventures. According to a report in
Variety, the company said it would continue to develop its three divisions:
the online film and music stock trading game, market research services, and
their publishing arm. The announcement signifies the completion of this
round of financing for the company, which started last month with NBC taking
equity in exchange for content for its and sites. HSX
president David Herman commented, “As HSX continues to strengthen our
community of entertainment-savvy consumers, build our brand in the
marketplace and expand into new product offerings, it’s important that we
continue to receive endorsements from such exceptional members of the
venture capital community”. [EB Insider]

>> TiVo and REPLAYTV Beware! Microsoft is On Your Heels

(indieWIRE/12.20.99) — In its continuing quest to compete against everyone,
Microsoft revealed this week another market to add to its lists of
conquests: Personal Video Recorders. The announcement came from its enhanced
TV division, WebTV, which is joining forces with consumer satellite service
provider EchoStar Communications Corp. to create the WebTV Personal TV
service. The new service will allow satellite subscribers to purchase a
single set-top box and receive digital video recording capabilities,
customized news, games, Internet access, and interactive television shows.

The receiver retails at $299 ($349 with keyboard), with the Web TV Personal TV service costing a
monthly fee of $9.99 or $24.95 (for a premium service), in addition to the
standard monthly fee for satellite programming (which starts at $19.99).
With EchoStar’s current subscriber base of 3.1 million, the agreement gives
WebTV, which has roughly 1 million subscribers of its own, the opportunity
to quickly dominate the PVR market which was initiated this year by
companies like TiVo (which had 4,300 subscribers at the end of October) and
ReplayTV. [EB Insider]

>> Open Cable Battle: Comcast Reacts to GTE’s Antitrust

(indieWIRE/12.20.99) — Cable service provider Comcast responded this week
to antitrust allegations, filed in October by telecommunications firm GTE,
by telling a court that its services do not shut out competition for
high-speed Internet connections. According to a CNET News report, Comcast
Online General Manager David Juliano stated, “GTE and other telephone
companies are attempting to block the cable industry’s investment in
competitive high-speed Internet service. In this proceeding, GTE is trying
yet again to use the courts to slow down competition”. GTE spokesman Briana
retorted by stating that the Comcast charges were “ludicrous” and
added her company is, “trying to protect nondiscriminatory access for our
ISP, and all the other ISPs out there.” The suit is seen as part of a campaign by an
informal group of Internet Service Providers (ISPs), which includes America
and smaller ISPs, to force cable companies to open their lines to
competitors in a similar way that telephone lines are open to them. While
the movement has seen some local success (most notably in Portland, Oregon)
federal regulators have been reticent to force the issue upon nationwide
cable operators. If the open cable movement succeeds, it could result in the
faster widespread implementation of broadband Internet access and related
services. [EB Insider]

THE FUSE is a weekly news column from EB Insider, a new publication focused
exclusively on the developing Web-based film and video industry. To read
this week’s feature “As Net Fever Takes Hollywood, Web-based Development
Sites Make Their Mark
,” visit:

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