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DIGITAL MEDIA WIRE -- December 15, 2000
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o Entertainment Site To Merge With AtomFilms
o Sundance Releases Slate Of Works For Online Film Festival
o Trade Association Sets Standard For Recordable CDs And CD Players
o Game Software Developer iEntertainment Network Lays Off 33 Employees
o Musician Resource Site Tonos To Create Show For VH-1
o Briefly Noted: CenterSpan Communications, "The Cost of Streaming
Services," Manex Entertainment, Musicmusicmusic -, - Lyrick Studios - EnterTech Media Group
> Correction: Dec. 14 Edition -- Static

o Entertainment Site To Merge With AtomFilms

San Francisco --, an entertainment site that showcases
content produced with design software created by Macromedia, announced on
Friday that it will acquire Seattle-based AtomFilms, a film and animation
site. Under the terms of the deal, will acquire AtomFilms in
an all-stock transaction. Following the acquisition, shareholders of
AtomFilms will own 30 percent of the consolidated company. The deal is
expected to close within the first quarter of 2001. Rob Burgess, chairman
and CEO of Macromedia and chairman of, will become chairman
of the new company. Lawrence Levy, CEO of, will leave the
company, while Mika Salmi, the founder and CEO of AtomFilms, will be the
combined company's CEO. The combined operations will be headquartered in
San Francisco. "AtomFilms and were both created to pioneer
new forms of consumer entertainment and to develop new business models for
content creators," said Burgess. "By joining the energies and talents of
these two highly creative companies, we have the potential to change the
way people are entertained around the world." Burgess told that
the company will lay off about 100 employees as a result of the merger.
The combination of the two companies could serve as a shot in the arm for
online visual entertainment, which has seen companies such as Pseudo
Programs, DEN and shut down this year, and countless others
announce layoffs and restructuring plans. is one of the 50
most popular sites on the Internet, with over 30 million registered users,
according to Media Metrix. AtomFilms has syndicated its content to a wide
range of online and off-line outlets -- the company recently announced a
deal with Volkswagen to produce promotional short films, and has signed
deals to show its film content in theaters before full-length features.

o Sundance Releases Slate Of Works For Online Film Festival

New York -- The Sundance Institute, producer of an annual festival for
independent films, announced on Friday the slate of films that will be
shown during its first online film festival. The Sundance Online Film
Festival will be held in conjunction with the coming 2001 Sundance Film
Festival in January. The organization is calling the event "a showcase for
new works developed expressly for the Web and a retrospective of past Web
highlights," which will include "animation, live-action, documentary,
experimental, and interactive films." Streaming of the films will be
co-produced by St. Louis-based StreamSearch, which confirmed on Friday
that it has laid off 115 of its employees, according to VentureWire. The
company said it will retain between 30 and 40 of its employees in order to
work on the Sundance project as well as another online festival. Sundance
also announced that it will feature a Sundance Digital Center in Park
City, Utah, where the festival is held each year. In addition to being
online at, films under consideration for awards in the online
film festival will be screened at the Digital Center. "With our
presentation of the interactive pieces, we are especially delighted to
present work which points to the future possibilities of web
entertainment," said festival programmers Shari Frilot and Trevor Groth.

o Trade Association Sets Standard For Recordable CDs And CD Players

Santa Barbara, Calif. -- A standard has been set that will enable both
one-time recordable CD-Rs and re-writable CD-RW discs to be played on all
CD players. The Optical Storage Technology Association (OSTA), an
international trade association for the recordable products market, has
announced its MultiPlay compatibility specification for the computer and
consumer electronics industries. The standard is targeted at manufacturers
of CD and DVD players -- products that play traditional music CDs, but in
some products will not recognize and playback a CD-R or CD-RW that
contains audio content. Products meeting the new standard will be stamped
with a MultiPlay logo to inform consumers. The standard comes in response
to the upsurge in demand for CD-RW drives, which enable users to record
MP3 and WAV audio files from their computers onto discs, as well as the
growth in popularity of digital music.

o Game Software Developer iEntertainment Network To Lay Off 33 Employees

Research Triangle Park, N.C. -- iEntertainment Network, a provider of
online game technology for websites, announced on Friday that it will lay
off 33 employees as part of a restructuring effort to move the company
closer to profitability. The layoffs come largely in the company's
advertising sales division; iEntertainment said it will now focus on
pay-for-play gaming services. North Carolina-based iEntertainment Network
provides game technology to companies including AT&T's and
Earthlink's Games Arena, which allows players to talk to one another while
playing against one another. The company also develops combat and
roleplaying games for a pay-for-play model.

o Musician Resource Site Tonos To Create Show For VH-1

Culver City, Calif. -- Tonos, an online resource for aspiring songwriters
and musicians, announced on Friday that it will air a one-hour special on
cable music network VH-1. The program, entitled "VH-1's Road to Fame" will
feature an aspiring artist chosen from the Tonos website, and follow the
artist as he or she is shown how to break into the music business. The
artist will be shown in mentoring sessions with Tonos co-founders Carole
Bayer Sager and David Foster, who are both also award-winning songwriters.
Several of Tonos's executives previously worked for MTV's online
properties. The program is slated to air in January 2001.

o Briefly Noted:

(San Francisco) CenterSpan Communications, the winner of an auction for
the assets of bankrupt file-sharing exchange Scour, said it will charge
users for the ability to share music, films and games when the service is
reactivated, according to a ZDNet report. "The world is changing. There
are not the opportunities that there once were for the download of free
content," said CenterSpan spokesman Keith Halasy, in the article. "It's
been shown that content holders won't accept a free model." Current
versions of Scour's file-sharing software will no longer function on the
system, which will be newly equipped with digital rights management
security technology.,4586,2665004,00.html

(San Francisco) Streaming Media Inc., which operates
and organizes the Streaming Media brand trade shows, has released "The
Cost of Streaming Services" -- the company's first market report. The
report found that prices for bandwidth, streaming, encoding and storage in
the U.S. are roughly 30% to 50% less than the price for the same services
in the rest of the world. Also, the top streaming companies as determined
by Streaming Media reported that they rely on in-house employees for their
encoding services.

(Alameda Point, Calif.) Manex Entertainment, a digital media production
company, announced on Friday that Gary Kucher will serve as the company's
new president and CEO. Previously, Kucher served as president and CEO of Alameda Point-based Manex produced digital special
effects sequences in Warner Bros.' film "The Matrix" and Sony/Columbia's
upcoming release "Crouching Tiger, Hidden Dragon."

(New York) Musicmusicmusic, an interactive web radio provider, announced
on Friday that it will create an Internet radio station for New York-based Musicmusicmusic said that parents and
children will be able to listen online to songs such as "Rubber Ducky" and
"It's Not Easy Being Green."

(New York), a distributor of online video and audio
content, announced on Friday agreements with Lyrick Studios and EnterTech
Media Group to distribute video content online. New York-based will make five videos featuring Lyrick Studios' children's
character Barney available to purchase via download for $10, or to rent
for two days for $2.50. For EnterTech, will distribute 50
titles ranging from children's videos to full-length features, available
to rent from $1.99 to $3.99 and for sale from $5.95 to $9.95.

> Correction: December 14 Edition -- Static

A story in Thursday's edition of Digital Media Wire misstated the name of
the new CEO of Static. His name is Jay Haynes.

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