Celerity Systems Adds VOD Partners

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There's another new VOD kid on the block.

This time, it's Celerity Systems Inc., which says it
will jump into the interactive-video business as early as this summer.

The cable industry is included in Celerity's sights,
said Ken Van Meter, a former Tele-TV executive who is now Celerity's president and
CEO.

"Cable operators and the telephony business are
tremendously advantaged," said Van Meter. "They are ideally suited to
participate in this market."

Once Celerity solidifies technology and alliance plans, Van
Meter is confident the company will be poised to compete in the cable industry.

"We have logical price points, and as a team have
invented products that don't just function as prototypes. The hard part is making the
technology a business," he said.

So far, Celerity concentrated most of its efforts
internationally, locking in interactive-video installations in 14 locations.

Now, with the cable industry casting what appears to be
more than a cursory glance back in the direction of video-on-demand, the timing may be
right for Celerity to snag some domestic broadband wins.

The list of companies reentering what was a dead VOD market
three years ago is now climbing sharply. In the last two months alone, companies including
Diva Systems Inc. and SeaChange International/Scientific-Atlanta Inc. have said
they'll go after the VOD market. Others are anticipated to enter, too.

The revived interest stems from two linked factors,
according to MSO executives: a more solidified standards environment; and dropping costs
for disk storage space and other electronics pieces along the
"cost-per-bit-stream" economic chain.

Celerity's plan is to design, develop and produce
interactive video servers and digital set-top boxes. To accomplish that, the company spent
the past year hammering out strategic relationships with a cross-section of media
communications companies.

Those partners include Fore Systems Inc., for ATM switches
and adapters; Speer Communications, for digital authoring, encoding and content; CEI, for
digital production studios; and others in an alliance knitted together to compete against
similar services.

Celerity hung its VOD shingle in 1993, and last year had
revenues of $4 million. Analysts project $18 million in revenues for 1998.

This summer, Celerity plans to launch two new products: its
Application Development Platform, or ADP; and a "next-generation" interactive
digital video set-top box, the T-6000, Van Meter said.

In the next few months, Celerity will put its financial
infrastructure in place, Van Meter said, while offering content and applications through
future strategic alliances.

One of those alliances could be with National Geographic
magazine, he said.

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