>>One of Liberty Livewire's key plans is to integrate the production of content for the Web with the creation of films, television and advertising, rather than doing it after the fact.<<
That will all be done with Actv software. The partnership is called HyperTV with Livewire
Liberty Goes Hollywood To Support Next-Gen Content
By Rebecca Cantwell, Inter@ctive Week
May 22, 2000 3:18 AM PT
URL:
zdnet.com
Liberty Media is jumping into the distribution of interactive content for television and personal computers with a new venture built on Hollywood expertise in creating top-notch films.
The company's recently formed subsidiary Liberty Livewire will take shape this summer after it finishes acquiring three leading post-production companies: Four Media, Soundelux Entertainment Group and Todd-AO for more than half a billion dollars.
The purchase of three of Hollywood's largest experts in sound and film editing and their high-tech offspring will position Liberty Livewire as a potent delivery vehicle for broadband content over cable modems and turbo-charged phone lines to television sets, personal computers, Internet appliances and even theme parks.
One of Liberty Livewire's key plans is to integrate the production of content for the Web with the creation of films, television and advertising, rather than doing it after the fact.
"It has been our theory from the beginning that the offering and preparation of content for Web material was very similar to normal post-production," said David Beddow, chief executive of Liberty Livewire. "In terms of the preparation of material that is associated with long-form television and commercials, it would be more efficient and a better experience to create the Web content as you're creating the program itself."
Beddow said he has often heard the people responsible for creating Web content after a program has been finished saying they wished they had an extra interview, five more exterior shots or extra outtakes to work with. By integrating the creation at the front end, his company hopes to eliminate such complaints.
Noting that Todd-AO is an old-line film industry post-production company, Jim Penhune, an analyst at The Yankee Group, said Liberty Media's buy into that industry will give it both production reach for video content today and the ability to adapt to the future.
"They're taking an old, established brand in post-production as it used to be and upgrading it into something that includes [not only] an existing market, but also new digital markets," Penhune said. "And they're looking ahead to predictions that film prints will be replaced by digital distribution even in theatres."
Liberty Media grew up as a programming investment arm of cable giant Tele-Communications Inc., and now holds controlling stakes in Discovery Communications and Starz Encore Group. Acquired by AT&T as part of its purchase of TCI last year, Liberty Media is operated independently, with former TCI chief John Malone as chairman. With a market value of roughly $60 billion, Liberty Media has developed a reputation among Wall Street experts for smart investments that others watch closely.
AT&T's ownership of Liberty Media also drew extensive scrutiny from federal regulators concerned about the concentration of control over programming and subscribers as they reviewed AT&T's purchase of MediaOne Group.
Liberty Livewire will complement those assets and the cable channels that Liberty Media controls by providing services to movie studios, production companies, advertising agencies, independent producers and networks, Beddow said. "My organization is purely a third-party service organization," he said. "I don't own any content. I sell my services to people creating content. At the moment, Liberty Media is not a very big customer. Our largest are Paramount [Pictures], [The Walt] Disney [Co.], Universal [Studios] and Viacom."
A proxy statement recently sent to Todd-AO shareholders in advance of a June 9 meeting to consider the deal provided details of Liberty Livewire's plans, including:
Enabling interactive video programming and advertisements
A high-capacity server network for caching multimedia programming and elements
Connections to caching servers for broadcast, cable and Digital Subscriber Line access to interactive elements and streaming video
Electronic cinema distribution to theaters
Interactive delivery to point-of-sale, public spaces and other nontraditional venues such as theme parks, restaurants and malls
Various services to facilitate the simultaneous or coordinated use of televisions, PCs and Internet appliances
Todd-AO is one of the world's largest independent post-production houses. The company and its subsidiaries provide sound, video and ancillary services to the movie and television industries in the U.S. and Europe. It has also worked in newer technologies, such as formatting for high-definition television and creating computer-generated graphics for TV, Web sites and movies. Liberty Media plans to acquire control for about $132 million in stock.
Soon after, Liberty Media intends to close on the purchase of Soundelux for about $88 million. That company's audio production and post-production services have contributed to numerous Academy and Emmy award-winning movies and records.
Four Media, which Liberty Media recently purchased for $300 million, provides technical and creative services in film, video, sound and data to producers and distributors, having invested heavily in digital systems and equipment in recent years.
"Our extensive relationships with television programmers and advertisers will serve as the springboard for a strategy centering around the creation and delivery of new, interactive forms of entertainment and advertising content," said Four Media CEO Robert T. Walston when the deal closed last month. He will serve as Liberty Livewire's chief operating officer.
Beddow will run Liberty Livewire from Los Angeles. The cable technology veteran served as executive vice president at AT&T Broadband until April. Previously, as CEO of TCI's National Digital Television Center, he oversaw the implementation of digitally compressed cable channels that are now beamed around the nation from the Headend in the Sky at the center in Littleton, Colo.
Liberty Livewire has entered into a series of long-term deals with AT&T to obtain Internet hosting and distribution services from AT&T and to trial new services designed to accelerate Web site download times, increase the reliability of Web sites, manage sudden changes in Web page access volume and track Web site performance. Liberty Livewire will use AT&T data centers in New York and Redwood City, Calif., and will likely use the @Home network in the future.
Assuming Todd-AO shareholders agree to the takeover in June, the new venture will get some Hollywood names as well as know-how. Slated to join the board of the new company is Todd-AO board member director Sydney Pollack, whose 17 films have received 46 Academy Award nominations, and Todd-AO CEO Salah Hassanein, previously an executive at Warner Brothers and United Artists.
Liberty Media's aggressive move into the market is the latest indication of the multibillion-dollar investments being made in enabling two-way content that can be sent over upgraded cable systems, turbo-powered phone lines or wireless technologies.
The Yankee Group's Penhune said Liberty Media is not alone in investing in technology that will marry traditional content with myriad digital venues. "I don't think it's a unique angle for Liberty Media, but they may be ahead of the curve and closer to broadband delivery through their programming," he added.
As more than 30,000 people gathered this month for Cable 2000 in New Orleans, hundreds of companies were showing various interactive technologies. Observers noted that many such products have gone from the over-hype of a few years ago to hazy promises of more recent years to actually being demonstrated. Widespread market deployment remains a few years out.
A big stumbling block has been the slow development of interoperable set-top boxes with a lot of computing power that customers can buy at retail stores and take from one cable system to another.
Liberty Media CEO Robert Bennett recently cited the lack of such powerful boxes as the key obstacle to delivering to customers' homes the content that Liberty Livewire will produce. "There is some ability to interact and do commerce on the current generations of boxes, but for full-motion, fully interactive applications you need the next generation, and the gating issue has been getting those deployed in large numbers," he told analysts.
While some advanced set-top boxes are expected to be in retail stores by the summer deadline set by federal regulators, so far standards allowing interoperability have been developed for hardware, but not software, by the industry's OpenCable project.
"Without software that's interoperable, these boxes aren't interoperable," said Allen Schmitt-Gordon, a software engineer at industry research consortium Cable Television Laboratories (www.cablelabs.com), which is coordinating the development of standards. "The software project isn't due in the marketplace until Christmas of 2001."
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