iLive To Sail The ISP Waters

iLive Inc. , which offers streaming video on a pay-per-view basis, Friday says it is planning to open up as an Internet service provider in about two weeks.

The Irvine, Calif.-based company plans to first roll out DSL and dial-up access in the Los Angeles basin with expansion into the rest of the country contingent on the results of a possible acquisition of a service provider with national connections.

“It makes sense for us to get into the backbone business,” says iLive CEO Albert Aimers. “Getting into dial-up is easy, but since we’re a broadband content provider, it makes sense for us to pursue DSL access for our customers, similar to how AOL provides content and access. We want to focus on as many people as possible.

Aimers could not mention which national ISP the 10-person company had its eye on – but said if the acquisition fell through, iLive would work with another Internet backbone company to still make the jump into the ISP marketplace. The last piece of the puzzle is the pricing structure and rollout schedule outside of LA.

“By entering the ISP business, iLive gains the ability to enhance our users online experience while generating additional revenue,” says iLive president Scott Henricks. “The plans allow for the vertical integration of our business model as we will now take ownership of the user experience from log on to watching one of many exciting shows on the iLive Network.”

iLive says it will continue to offer its business production services as well as its customer product. The company has produced in excess of 250 episodes, viewable on the Internet. Currently, iLive is developing a business-to-consumer model that focuses on online entertainment, which includes a wide array of shows from “@Home in Hollywood” (celebrity homes), “Cooking Channel” (how-to instructional videos) and “Girls Night Out” (real television).

The company’s trek into ISP land may have a trump card in that its marketing plan includes a peer-to-peer system that pays its subscribers a percentage of the referrals.

It works like this: the typical pay-per-view shows on the iLive network cost $2-5 to view. If the member enjoys an episode and would like to share the trailer (a free highlight of the episode), iLive will make it possible.

In turn, if the friend decides to purchase and watch the episode, iLive pays the member 25 percent of whatever the friend watches from that day forward. If that friend shows the trailer to another friend, iLive will pay the original member a further 15 percent of whatever that second friend consumes in entertainment on the iLive site, for as long as that person is an active member.

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