TVN to Offer VOD In California System

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TVN Entertainment Corp. will launch its first full-fledged
video-on-demand operation in a small California system.

TVN will offer VOD movies and programming with start,
pause, fast-forward and rewind features to Santa Clarita-based Strategic
Technologies' 2,500-subscriber base, TVN president and CEO Jim Ramo said.

The two-way, hybrid fiber-coaxial plant will clear six
analog channels to offer the VOD service, said John White, general manager of Strategic.

TVN will install a video file server at the system's
headend to facilitate the service, and it will provide the General Instrument Corp.
digital-cable boxes.

The system will pay an undisclosed fee for the digital
boxes, which are necessary to implement VOD, and it will share an unspecified cut of
revenues generated from the VOD service.

TVN will handle all of the marketing and transactional
duties within the system.

TVN will offer a minimum of 40 movie titles, including
current PPV releases from the major studios, Ramo said.

"The studios have been very supportive," he
added. "I think that everybody realizes that the industry is in a test mode, and they
are willing to participate in the process."

For the system, which serves a middle-class or wealthier
subscriber base, the move to VOD is major -- particularly since it has never offered PPV.
Strategic does offer digital-multiplexed-premium and digital-music services.

"We're going from nothing to offering everything,
so we'll have to go through a major educational process with our customers,"
White said. "But providing VOD with TVN will put our customers on the leading edge of
the digital products and services offered by the cable industry."

Ramo would not predict how well the VOD service will
perform, but he said the company will monitor the system's performance. "We
chose it because it's close by us, so we can monitor the service to make sure that it
works for all parties," he added.

Rather than waiting for initial results from the Strategic
system, Ramo said, the company will launch several other VOD services within the next few
months. "We'll pick and choose from some of the smaller systems and expand the
rollout," he added.

In other TVN news, the company launched its near-VOD
service in several WEHCO Video systems this summer, said David Sears, senior vice
president of affiliate sales and marketing for TVN. The systems -- located in Arkansas,
Texas and Mississippi -- represent 93,000 subscribers.

The company also announced several other immediate and
future NVOD launches in small and midsized systems representing a total of 169,000
subscribers.

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