TCI Music Eyes Box-Web Marriage

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TCI Music Inc. is set to announce this week an agreement
with a key supplier that will open new business opportunities in the Web domain for The
Box and other TCI Music properties.

TCI Music is already supplying music videos on-demand
through its Streamland site, using audio- and video-streaming technology from RealNetworks
Inc. Now, it will collaborate with RNI to develop a wide range of high-quality music
applications, some of which are likely to involve the delivery of services over the
high-speed-data links supplied by @Home Network.

Both TCI Music, through its majority owner, Liberty Media
Group, and @Home, through TCI Ventures Inc., are affiliated with Tele-Communications Inc.

"We think that @Home would make a wonderful
partner," said Sharon Brown, senior vice president of programming and strategic
marketing at TCI Music. "We're still in the planning stages as to what the
specific uses of the technology will be, but there are many possibilities."

RNI's client-server system streams audio/video
segments in real time from a Web site at various levels of quality, depending on
individual users' modem speeds. It reaches full-screen resolution at access speeds of
100 to 300 kilobits per second, depending on the type of video and frame rate.

The technology also supports near-CD-quality audio over
28-kbps modems and "flash" animation synchronized with the audio.

TCI Music plans to expand the variety of audio/video and
animation-enhanced features of Streamland and other Web products affiliated with TCI
Music's SonicNet, and to bring 97-channel audio-music service DMX, as well as The
Box, onto the Internet, officials said.

RNI can establish a variety of billing methods specific to
each service and to segments within the services, including monthly premium fees or
per-use charges.

For example, said Chris Otto, executive producer for music
services at RNI, The Box could use this technology to offer a true video-jukebox service
over the @Home feed that charges customers on a per-use basis for videos delivered at
quality levels approaching that of standard television. But before such a capability could
be implemented, The Box would have to negotiate new intellectual-property arrangements
with record companies, which probably means that this use of the service is some time off,
Otto said.

Instead, a more likely near-term use of the streaming
technology for The Box in cyberspace -- possibly with @Home -- would be to operate the
service in the same broadcast mode as it operates in today over cable, which involves
playback of viewers' requests on a first-come, first-served basis. Such requests
could be made interactively over the Internet connection, rather than by using the phone.

Officials noted that the Web environment would support
greater segmenting of the music than is possible in a one-channel TV service. Plus, it
would allow better local engagement with audiences than is possible in the
"four-plex" mode of The Box, as it is offered in digital mode over TCI's
Headend in the Sky service.

"We're looking at every opportunity to take
advantage of the technology that The Box has developed to maximize localism, choice and
control," Brown said.

Brown added that one of the questions to be worked out in
shaping a business plan for the Web presence of The Box concerns the relationship of that
service to the current cluster of SonicNet sites, which were acquired by TCI Music late
last year.

"We've already hooked up the Webmaster for The
Box with the SonicNet team," Brown said. "You're going to see dramatic
changes in The Box on the Web."

Possibilities also include more informational features with
videos; chat and other forms of interaction; and CD and other electronic purchase options.
"It's fair to say that there will be a strong transactional component [with The
Box] as we move ahead," Brown said.