E-On plays a bigger game

Stand by for entertainment as a small company moves into the wider market. By Cliff Joseph

Entertainment Online, the UK-based online service, is expanding its operations and preparing to launch into Europe and the US. E-On, as it calls itself, had a pretty humble beginning. It was launched in July last year by Mark Bernstein and Herman Hauser, who is best known as one of the founders of Acorn. The service initially offered a modest selection of traditional games, such as Chess and Reversi, plus a few standard arcade games. But, in recent months, E-On has been busily signing licensing deals with major games companies such as Ocean, Psygnosis and Maxis.

"We have licensed more games and signed up more publishers than any other entertainment service," says Bernstein. Subscribers to E-On can download popular games such as Maxis' SimCity to play on their PC at home, or they can play online against other users in new, multi-player games developed especially for the Internet.

E-On has just launched an adventure game called Twilight Lands, which will be followed by an action game called Battle City, for the more violently inclined. (To play trial versions of the games free, enter the Beta Zone on E-On's Web site.)

During its first year, the company concentrated on establishing partnerships with games companies and Internet service providers, which can offer E- On as part of their package of services. It has done little advertising until now, and its UK membership is only around 1,000 at present. However, with backing from investors such as Associated Newspapers, the company is now expanding its UK service, adding foreign-language services for France, Germany and Italy, and preparing for its US launch next month.

The US is the largest market for Internet services, and Bernstein estimates that E-On's family-oriented service has a target audience of almost 13 million homes in the US, compared with 3 million in the European countries where it operates. But the US market is crowded and competitive, so rather than compete directly with established services such as CompuServe and America Online, E-On has gone into partnership with them. A standard subscription to E-On costs $9.99 a month, but marketing agreements allow CompuServe and AOL to offer access to E-On as an optional extra for $5.99 a month.

Bernstein acknowledges that there are many other games services in the US, but argues that "not a lot of them are aimed at families". As well as aiming at the young males who form the core gaming market, E-On is attempting to attract families to the service by offering a selection of educational software titles, and an online magazine called Neon. There are also plans to launch an online shopping service during the summer. These parts of E-On are still pretty basic, however, and games content is currently the main selling point.

E-On's ambitions aren't limited to the Internet, though. The majority of homes in Europe and the US still don't have PCs, and in the next few years Bernstein expects E-On to enter many homes through broadband services such as cable and digital TV. The bandwidth limitations of the Internet restrict the type of games that can be played online, says Mr Bernstein. "But with broadband, much more exciting content can be delivered."

At the moment many games are simply too large to be conveniently played or downloaded using conventional modem links. Cable and digital TV services will provide access to games that can currently only be distributed on CD-Rom.

E-On is already positioning itself for the arrival of broadband services. It has just signed a deal with a German cable company called InfoCity, and Bernstein says that he expects half-a-dozen similar deals to be completed in the next few months.

The advantage of these cable deals for the consumer is that some cable companies may provide E-On as part of their standard package of TV channels, which will mean that there is no extra cost for using the service.

The company is also working on interactive TV programming, though Bernstein recognises that it will be "two to three years" before digital TV has enough of an impact to make these new programs widely available.

Content is the key, says Bernstein. "Digital television will offer 200 channels, but there's not enough content even to fill 100 of them."

It's still unclear what effects the coming digital revolution will have on the television industry, but E-On's emphasis on developing content could pay off. In which case, you may soon find E-On listed in the Radio Times rather than in the pages of a computer magazine.

Entertainment Online

http://www.e-on.com