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Blockbuster, Enron Tap nCUBE for VOD

9/10/2000 8:00 PM Eastern

More waves were made on the video-on-demand waters last week, as nCUBE won a deal to supply the video-streaming platform for the budding digital-subscriber-line-based "entertainment on-demand" co-venture of Blockbuster Inc. and Enron Corp. Financial terms were not disclosed.

Under terms of the equipment portion of the deal, nCUBE will supply its "MediaCUBE 4" end-to-end streaming system, which is made up of video servers and software applications, and the company's "nABLE" suite of back-office management tools.

The platform also provides VCR functionality, allowing viewers to pause, fast-forward and rewind digitized video.

Slated to launch in several U.S. cities later this year, the Blockbuster-Enron entertainment-on-demand service will target Blockbuster's global customer base of 65 million households. Beginning in 2001, Blockbuster expects to extend the service internationally.

"When this is launched, this could be our biggest customer by far," nCUBE president Michael Pohl said. "We can provide [Blockbuster and Enron with] the economies of scale and the availability to do what they envision with this platform."

That platform was spawned in July when Enron and Blockbuster inked an exclusive, 20-year deal to piece together a Blockbuster-branded service that will initially feature movies on-demand. The two companies will eventually augment it with on-demand access to a cadre of Internet services and games.

The scalability achieved by nCUBE's "hypercube-based" architecture will enable the Enron-Blockbuster service to "respond to demand quickly and economically," Enron Broadband Services CEO Kenneth D. Rice said in a press release.

Run over DSL lines, the service will latch onto Enron's "Intelligent Network" to obtain lofty data speeds. Enron's high-speed network bypasses a sometimes slow and congested public Internet, and it will be used to store, stream and manage all digital content for the service.

The service, which will require a separate converter box, has already assembled a large cast of distribution partners including SBC Communications Inc., Verizon Communications, Qwest Communications International Inc. and Covad Communications Group Inc.

The deal with Enron and the Viacom Inc. subsidiary is a boon for nCUBE, which has made much more progress in the international market than it has in the United States.

Currently, nCUBE's only other domestic VOD deal is with DemandVideo Corp. and Seren Innovations Inc., which are offering VOD service to about 46,000 homes passed in St. Cloud, Minn.

Internationally, nCUBE is involved in commercial and trial VOD deployments with Bertelsmann AG in Germany and with Kingston Communications plc, Telewest Communications plc and Yes Television Ltd. in the United Kingdom, among others.

"We expect to have other [launches] to announce by the end of this month and into next month," Pohl said, noting that nCUBE has engaged in discussions with several "major MSOs."

"We're the only company that's been certified by Scientific-Atlanta [Inc.] so far for its content-delivery package, so we hope to leverage that into some markets," he added, referring to the cable set-top maker.

In the meantime, nCUBE has some housekeeping to tend to. Earlier this year, SeaChange International Inc. filed a lawsuit against nCUBE, claiming that nCUBE infringed on its "MediaCluster" digital-video-server patents.

During a July 27 hearing, the Delaware court offered the parties two options. One was to await a ruling, which could take several months. The second was to agree to a very early jury trial on all issues in the case. The court ultimately set a Sept. 18 jury-trial date.

According to SeaChange, the company filed for its patent in 1995 and began deploying that equipment in 1997. The patent came through last year.

"We continue to believe that it's somewhat frivolous on their part to file that," Pohl said, referring to the lawsuit. "We hope to have it resolved by [the trial date]. The judge wants to have it done soon, and we agree."

Jim Forkan contributed to this report.

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