Moving the Boundaries of Technology: Studios, Blockbuster Entering Into Test Of Video-on-Demand, Interactive TV.

The curtain is going up on video-on-demand, the long-awaited technology that lets users stream movies and other programming to their television sets or personal computers via cable and DSL lines.

With Santa Monica-based MGM Home Entertainment and other studios now partnered with Blockbuster Inc. to roll out a test run in four cities, including Irvine, it seems the debut of personalized video is a step closer to reality for millions of consumers.

The race to provide the service is crowded with a wide range of communications companies. There are content aggregators like Blockbuster and Intertainer Inc. of Culver City; cable providers like Time Warner Inc.; and several movie studios, a few of which are jumping into the fray by offering their own services.

"Interactive television is the wild, wild West," said Mark Sonnenberg, Intertainer's executive vice president of content and marketing.

The Irvine test is one of four being conducted nationwide by Metro-Gold-wyn-Mayer Inc., Viacom Inc.'s Blockbuster unit, and Enron Corp., a Houston-based utility company that is providing its fiber-optic network for the test.

Beginning later this month, test users will be able to access films and other programming from a set-top box connected to a DSL line.

Blockbuster officials would not disclose complete details of the test, such as how many homes would participate in the test or how they would be selected. A spokesman did say that the company expects to have licensing deals with several major movie studios by mid-December, when the test is to begin.

"We've secured adequate content, for the test, but it's not optimal," said Blockbuster spokesman Randy Hargrove. "We're continuing to work on that."

MGM has licensed about 50 titles from its vast archive to Blockbuster for the test.

"We're not sure where the video-on-demand business is going to go," said David Bishop, president of MGM Home Entertainment. "We want to understand more about consumer behavior, and we want to make sure that we do that in an intelligent manner. For this stage of video-on-demand's development, this is the best way to go."

Not another Napster

While video-on-demand gears up, Hollywood studios are taking steps to ensure that it doesn't go the way of Napster, the controversial Web service that offers free music downloads.

"One reason why Napster developed in the recording industry is because there was really no existing business model in place when those technologies developed," Bishop said. "The consumer didn't have a legitimate option to purchase music over the Internet. Our plans are to make sure that we have robust technology in place to prevent our content from being pirated. We also realize that to have a hack-proof system is probably not viable, but we can make it so efficient that it won't be worth the effort to pirate the content."

While MGM is partnering with Blockbuster, Sony Pictures Digital Entertainment is in advanced talks with several studios, including Warner Bros., to offer a rival service.

"People want to see movies on the Internet, and we -- along with other studios -- plan to give them a chance to do that," said Yair Landau, president of Sony Pictures Digital Entertainment in a press release.

Last week, Time Warner Cable officials announced that some of its digital cable subscribers in West Austin, Texas will be offered on-demand programming beginning Dec. 13, after a successful six-month test was conducted there. The service enables digital cable subscribers to choose from a list of more than 100 movies that they can play, pause, or rewind during a four-hour period on a certain cable channel.

The service is limited to digital cable subscribers because only they have the special cable control boxes that enable them to do the necessary two-way communications to order movies from the Time Warner network.

Inking major deals

In Los Angeles, Intertainer is positioning itself to be Hollywood's content aggregator of choice. The company already provides an array of films, music, videos, television shows and other content via cable or DSL lines in a few small markets outside California.

Intertainer has led several successful trials of its services and inked deals with Hollywood elite, including Warner Bros., Columbia TriStar Television, The Disney Channel, DreamWorks SKG, ESPN, Sony Music and 20th Century Fox. Intertainer also has formed partnerships with leaders in digital media, including Comcast, Intel, Microsoft and Quest.

Intertainer's partnerships enable it to distribute newly released movies and programming, such as Warner Bros.' "The Perfect Storm," which will be available to Intertainer subscribers later this month.

Industry insiders like MGM's Bishop say .wider deployment of video-on-demand will depend on further broadband penetration, and that hinges on how fast telephone and cable companies move to provide it.

"In the areas where you have broadband penetration, video-on-demand is already happening," said Bishop. "L.A. is growing at the same or greater rate than the rest of the country. I think we're still a few years away from turning it into a meaningful business, but the growth rate is very rapid."