Enron and Blockbuster team on entertainment on-demand service

Enron Broadband Services and Blockbuster announced yesterday a 20-year, exclusive agreement to deliver a Blockbuster entertainment service, initially featuring movies on-demand, via the Enron Intelligent Network. The alliance combines a global, end-to-end solution that can effectively deliver a wide variety of secure, on-demand entertainment. Under the agreement, Blockbuster will provide content for the entertainment service and market the service to its customer base of 65 million households worldwide. Additionally, Blockbuster will sell DSL through its nationwide network of stores.

"Entertainment on-demand is perhaps the most visible example of the power of Enron's broadband applications. With Blockbuster's extensive customer base and content, and Enron's network delivery application and the capabilities of the distribution providers, we have put together the ‘killer app' for the entertainment industry," said Kenneth L. Lay, chairman and CEO of Enron Corp.

Enron will encode and stream the entertainment over its global broadband network infrastructure, provision bandwidth on-demand, store the entertainment content and provide an unparalleled quality of service. The Enron Intelligent Network is designed to allow the scalability necessary to deliver secure, high-bandwidth content to a large population of simultaneous users. Enron's broadband delivery platform includes a distributed server architecture, software intelligence, and network monitoring and control.

Distribution providers SBC, Verizon, Qwest, Covad, Telus and ReFlex will design the architecture of the high-performance network to deliver a complete service package, including both entertainment on-demand and high-speed access to the Internet.

Initial distribution providers SBC Communications Inc., Verizon, formed by the merger of Bell Atlantic and GTE, Qwest, Covad Communications, Telus and ReFlex will offer a secure infrastructure for the on-demand service that will deliver entertainment to consumers' televisions through high-speed digital subscriber lines (DSL). Enron and Blockbuster also will identify additional distribution providers and delivery methods to reach a broad range of customers.

Enron and Blockbuster plan to introduce the entertainment on-demand service in multiple U.S. cities by year-end. Beginning in 2001, Blockbuster expects to extend the service to other domestic and international markets.

For the first time, customers will be able to choose from a large library of movies through their TV screens and enjoy VHS-quality or better with VCR-like control (pause, rewind, stop). The service will be expanded to other entertainment choices, including games and Internet services, which can be accessed either through the television or PC.

"The ultimate winners in entertainment on-demand will be determined by marketing expertise and brand strength, resources, innovation and commercial alliances. Blockbuster, Enron and our distribution providers are uniquely positioned to succeed," said John Antioco, Blockbuster chairman and CEO. "These agreements give first-mover advantage to the involved companies that should enable each of us to capture a significant share of what industry experts project will be a multi-billion dollar annual business. It's the ultimate ‘bricks, clicks and flicks' strategy."

"This video on-demand market trial reinforces SBC's commitment to bringing next-generation broadband applications to the mass market," said James D. Gallemore, executive vice president, SBC Strategic Marketing. "As a leading DSL provider, SBC's alliance with Blockbuster and Enron will enable our customers to benefit from value-added applications that enhance the broadband experience."

"Blockbuster's service highlights the true strengths of DSL when compared to other broadband alternatives," said Fred D'Alessio, president – advanced services for Verizon. "The appeal of this service is destined to make it indispensable for home entertainment."

Edited by Stephen Heiser