By Brad King

2:00 a.m. Apr. 10, 2001 PDT

Internet media companies are convinced that consumers will embrace subscription services for online entertainment, but they also realize they need to keep up with the ever-changing times.

What they've discovered is that consumers are no longer willing to just sit in front of their computers listening to music. They want it on their television and mobile devices. They want entertainment anywhere they can get it, and they don't want to subscribe to numerous services to get it.

So they are developing services that provide online entertainment over multiple mediums.

"If you have one collection of media in your house, you want to consume it in multiple ways," said Mark Tucker, CEO of Hit Hive, a company that has created distribution networks that will transfer data anywhere.

"If you have AT&T cable at home, how does the consumer access the America Online subscription services on the television? We allow for multiple access points. Each access point has an individual relationship with the consumer, but you can get your information anywhere you are."

Hit Hive has developed an infrastructure platform that allows wireless carriers to license and deliver content to their consumers. The Mobile Music Center delivers content to people through a secure distribution network.

But the cell phone isn't the primary market for new media services. The convergence of Internet media with traditional distribution networks is being driven by the development of personalization technologies like TiVo that allow television watchers to control their viewing experience.

As revenue-generating commercials face extinction while personal recording devices gain popularity, the entertainment industry needs to explore new ways to make money.

"Something has to happen with television because of TiVo and personalized television," said Eric Scheirer, Internet media analyst for Forrester Research.

"People don't want advertising, so that is going to be a problem when it comes to regular network programming. There needed to be transaction programming that allows these programs to continue to make incremental revenues for everyone involved."

Analysts at PriceWaterhouseCoopers predict that digital cable will reach 35 million households by 2004, nearly 50 percent of all cable-ready households in America. That opens the door for media companies to develop subscription models built around Internet and television properties that can eventually be delivered across multiple networks.

RealNetworks has been developing its tiered subscription service, called the Gold Pass, around music and sports.

The lowest rung of the service allows customers to have access to all of the local radio broadcasts of major league baseball games for $4.95 a month. The highest rung gives consumers access to content from the House of Blues, video and radio broadcasts of major league baseball and professional basketball, broadband movie trailers and interviews, along with the Real Player Plus media player.

The Gold Pass service comes with a personalized search engine that allows users to search video clips, scan audio snippets and create personal highlights from sporting events without ever watching or listening to a game.

So far, 175,000 people have signed up for the high-end service.

Eventually, RealNetworks hopes to develop its pay service to the point where subscribers will have access to on-demand movies or songs as well.

"Consumers have been screaming out for more action in less time," said Larry Jacobson, the chief operating officer of RealNetworks. "If you add the temporal element to this, then you can get into a space where the programming begins to feel different because you can cut out the editors and you become the producer."

For the service to be successful though, Jacobson said he expects it will move away from the PC. As content migrates from the den to the living room, Internet media companies will increasingly compete with traditional network television.

"When we begin to take the value of the network out of the hands of the television producers and put it into the hands of the consumers, that's going to be a very scary time for broadcasters," Jacobson said.

But providing video to users through the television is going to be a difficult proposition, Scheirer said.

"Within the next couple of years, we are going to see cable bringing very high-quality video to the household, and that makes it difficult for Internet companies to compete with them," he said. "There will be little pieces of video available, but the home for video delivery is going to be through the cable networks."

Still, AtomShockwave has found a way to merge its online destination site, where wannabe filmmakers upload their short films. The company has already signed a deal with Showtime and the Sci-Fi channel that will bring the best of its feature shorts to the small screen.

"There is still lots of space to become an aggregator in the cable world," Scheirer said. "AtomShockwave can position itself with both its Internet channel and its cable television deals. They might be able to leverage themselves in such a way that they can use the cable services to help brand their name and eventually become their own channel."

Not everyone is going after the television market though. For fans of live music, getting out of the house and down to the local clubs is the most important part of the experience.

The House of Blues hopes to develop an entire lifestyle network that consumers will pay to join, much like America Express has deals with merchants to offer discounted rates to its credit card holders.

The company has already started offering limited subscription that allow users to get pre-sale tickets, discount food and retail services, an 800-number that allows you to plan a trip, access digital music and get preferred access to hotels and lounges associated with House of Blues venues nationwide.

"We're offering a lifestyle," said Stephen Felisan, the House of Blues' senior vice president of technology. "We can tailor our subscription to the people who like live music. We want to create a VIP room that spans across the country."