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Supplier of Interactive TV Music Programming Plans Leap to Computers

March 14, 1995|From Reuters

MIAMI BEACH, Fla. — Video Jukebox Network Inc., an interactive music video service known to its viewers as "The Box," plans a leap from the television screen to the computer screen to further its global ambitions, its chief executive said.

The supplier of interactive music programming to cable and broadcast television will set in motion a plan to digitize its music delivery system so that computer users can call up videos on their PC screens.

It also hopes that for the first time in its 10-year history it might break even.

The company is similar to the better-known industry leader MTV as a supplier of music video programming. But unlike MTV, The Box is tailored to individual markets. Viewers call a special telephone number to select videos to view on their televisions. Or they can sit and watch the selections ordered by other people in their viewing area.

Video Jukebox expects to establish itself as a cutting-edge supplier of interactive television programming in the coming year and position itself as the next worldwide music video service, said President and Chief Executive Alan McGlade.

This includes eventually going on-line through computer networks like the Internet, McGlade said.

"I think there's room for another global music television franchise," said McGlade in a recent interview. "I think we have a significant role to play. Our format and our approach to the business are unique."

Currently available through cable hookups in about 21 million homes in the United States and Britain, The Box allows viewers to call and order music videos for an average fee of about $2 each.

At any given time, several hundred songs are available for selection in each market, ranging from rap to pop to hard rock. Callers request a video and are billed on their telephone bills. The requested videos queue up and are run in order. So, the type of music videos broadcast depends on what the community wants to see.

"I don't see us as a rival to MTV. We occupy a different niche," McGlade said. "We provide music 24 hours a day, 7 days a week. We don't use veejays, we don't do game shows, we don't have youth shopping shows."

"As the moods of the audience change, the music moves off in different directions," McGlade said. "That's clearly a significant part of the appeal."

It's an appeal the company plans to take around the world, focusing efforts this year on upgrading technology to allow it to digitize its music.

Such a leap in technology would allow Video Jukebox to instantly deliver music videos via satellite around the world. The company currently ships videotapes and laser discs to its transmission points in various markets.

"It will give us a great deal of flexibility and control in terms of distributing by satellite at any time," he said.

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The technology upgrade would allow "The Box" to further its global ambitions, said Tom Maresca, an interactive TV analyst with New York-based Jupiter Communications Co.

"That's really what would allow them to compete on the next level," Maresca said. "It will allow them to expand their options."

McGlade also plans to expand the company's revenue sources from simply pay-TV viewers to include advertising and merchandising.

Meantime, the basic business is growing. McGlade said he expects viewer calls to rise from 6 million last year to about 8 million in 1995.

"My prediction is this year we will go from significant losses to break even or better," he said.

The company lost $1.1 million on revenue of $4.8 million in the third quarter ended Sept. 30. Year-end results have yet to be made public.

One of Video Jukebox's significant advantages, McGlade said, is a young, creative viewership that will follow the company's "cutting-edge" leap into new methods of distribution, including the possibility of on-line services.

"We have a young, sophisticated market of early adopters," he said. "If anybody's likely to try things with us, whether it's on-line services or the use of interactive converters with their cables, it's a young, creative, smart audience."

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