3 Baby Bells to join Ovitz in offering video service

October 26, 1994|By New York Times News Service

HOLLYWOOD -- The Creative Artists Agency is expected to join with three regional Bell companies as early as next week in forming a venture to offer video entertainment programming for telephone customers on the East and West Coasts, movie-industry executives said yesterday.

The venture would involve Bell Atlantic Corp., Nynex Corp. and Pacific Telesis, which have hired Michael Ovitz, the most powerful talent agent in Hollywood, to organize an enterprise that could provide movies and programming for as many as 46 million businesses and homes.

Representatives of the agency and the three telephone companies are planning to work through the weekend to complete the deal.

The planned collaboration would be the latest and biggest effort by the Baby Bells, which have ample cash reserves, to make competitive inroads against cable systems by using telephone lines running into homes and allowing millions of subscribers to call up interactive and entertainment services.

People involved in the negotiations said yesterday that the entertainment programming service, which will operate by phone and be viewed on television screens, is to start on a small scale on the East Coast late next year and rapidly accelerate on both coasts in 1996.

The three phone companies would put up at least $500 million to start the venture, in which the Creative Artists Agency will serve as strategic consultants.

Federal Communications Commission rules will require any Bell company to set up a programming company separate from its telephone services organization in providing video this way.

Mr. Ovitz and the representatives of the phone companies declined to comment publicly except to say that discussions were taking place.

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