HOLLYWOOD/22″/dt1st/mark2nd

By SARA FISHER

Staff Reporter

To say that Hollywood eagerly awaits the broadband revolution is putting it mildly.

Broadband, which refers to technology that allows large amounts of data to be transmitted at ultra-fast speeds, has emerged as the tool most likely to turn “convergence” from a buzzword into a reality.

When that happens, expect a sea change in the economics and distribution of entertainment content.

Convergence is the melding of TV’s entertainment and the personal computer’s interactive functions. With ultra-high-speed Internet access, users would be able to call up whatever movie they want to see on demand the content would be transmitted through broadband cables to their sets.

Further, a soap opera’s followers could “e-chat” with the show’s producers about plot twists as they unfold on screen. People could actually play along with “Jeopardy!” rather than just scream out answers in their living rooms. Targeted advertisements could play to selected viewers.

And there are countless applications that haven’t even been thought of yet.

“It’s safe to say that the traditional television model is going into a free fall,” said Robert Tercek, senior vice president of digital media for Columbia-TriStar’s television division in Culver City. “Now we’re all in the process of figuring out what the new one looks like.”

Industry players have time to finesse whatever new business model emerges. Only 19 percent of online households in the United States will have broadband access by 2002, according to Jupiter Communications. Many studio executives don’t expect to see a broadband audience reach critical mass until 2004 or so.

Complicating the rollout is a familiar chicken-and-egg issue often attached to the adoption of new technology. The more compelling broadband programming is offered, the greater the consumer demand. But media companies are unwilling to spend the money to create more broadband programming until there is greater consumer demand for it.

Still, Hollywood is eyeing the new technology with great interest, and more than a few players are jumping into it.

“Two years ago, we had to explain to almost every studio what broadband is,” said Jonathan Taplin, founder of Culver City-based Intertainer Inc., one of the first broadband networks to offer entertainment-on-demand services such as movies, TV and music videos via set-top boxes. “Now we don’t have to. Any lingering doubt that this technology won’t take off is gone.”

As doubt dwindles, studios’ plans are accelerating. One of the first applications is expected to be digital copies of movies and television shows on the Internet, in which consumers could request and view programming on demand via broadband either through set-top boxes on their TVs or through their computer screens. Because studios are merely reconfiguring existing assets, the economics are highly attractive.

“We can’t wait to get our movies and cartoon shows out of the vault and onto broadband,” said an executive from a local studio’s digital division.

Tercek points to more creative uses of broadband’s speed and interactivity. “One application is ultra-niche programming, in which the interactive features will be the glue that holds a community together,” he said. “It can keep a viewer there for a whole hour without channel surfing.”

Viewers might even want to watch the commercials rather than going to the refrigerator or channel surfing, because those ads will be precisely the ones the audience wants to see.

Indeed, advances in technology are expected to change the way advertising works. Rather than using estimates and statistical samplings from companies like Nielsen Media Research to determine the size of an audience, media owners will be able to use actual numbers measurable by computer.

Further, it will be much easier to identify the demographics and tastes of individual viewers, making it possible to target them more precisely than ever before. So while audiences for individual shows might be smaller, distributors of those shows will be able to charge more for advertising because advertisers will be able to target only the people they most want to reach.

The current broadband television applications already seem limiting. As the world goes digital, media executives envision delivering their movies, news and music to consumers via every gadget imaginable.

Scott Ehrlich, senior vice president and executive producer for News Corp.’s electronic-publishing division, hopes to turn Fox into the leading news provider for all digital technologies, be it the Internet, television or pagers. And Taplin lists cell phones, Palm Pilots and Nintendo game consoles as possible platforms through which his company can send its content.

“It’s an image that makes some people shudder and people like us rub their hands in glee,” said one executive at a major studio. “We’ll be unavoidable.”