NTL and Telewest launch first round of fightback against Sky

NTL and Telewest, the UK cable companies, will spend £60m launching television-on-demand services backed by the production companies Sony and Walt Disney, to try to fight British Sky Broadcasting's dominance of the pay-TV market.

NTL and Telewest, the UK cable companies, will spend £60m launching television-on-demand services backed by the production companies Sony and Walt Disney, to try to fight British Sky Broadcasting's dominance of the pay-TV market.

Both cable companies are launching services simultaneously although ntl's is more advanced, offering movies, advertising-free children's programmes, music videos, a "Pick of the Week" option of the previous seven days' broadcasts and adult entertainment.

Telewest will initially launch a movies-on-demand service but will add more content over the next 12 months.

Simon Duffy, the chief executive of ntl said: "This is a quantum step forward in terms of functionality and it gives us a differentiation against other pay-TV companies. This really is what the cable network is for. If you take the view that we are moving towards an on-demand world where people can consume what they wish, when they wish, then the TV schedule will become less and less relevant."

Eric Tveter, the president of Telewest Global, said: "For the first time we will be able to say that cable has a competitive advantage over satellite."

The new services will not require equipment upgrades and will appear as part of the viewer's normal electronic programme guide. Some content will be free, while movies will cost up to £3.50. Music will cost between 20p and £1.50 per video.

Ntl and Telewest already offer a basic on-demand service called Front Row but this offers only a limited choice of between 20 and 30 films that can be downloaded to start at 15-minute intervals.

The new ntl service offers a library of hundreds of movies plus television programming and music videos that can be downloaded instantaneously but then played like a DVD with pause, fast forward and rewind functions. The cable companies argue that on-demand services are more flexible and user-friendly than personal video recorders, such as Sky+, as there is no requirement to plan viewing and set recording instructions.

Ntl said it would spend up to £40m rolling out its new service, while Telewest said its initial investment would be £20m. Sony and Disney will provide films for the services through their FilmFlex joint venture, which also includes ON Demand, a UK technology group part-owned by the US video-on-demand company, Seachange. ON Demand already runs the Front Row service for the cable companies.

Other production companies that have agreed to supply ntl include the BBC, Nickelodeon and Playboy TV.