AOL Time Warner rolls out interactive video division

Playing on the diverse assets of the recently merged company, AOL Time Warner Inc. (AOLTW) announced the creation of a new Interactive Video division Thursday, hoping to accelerate the growth of video-on-demand, interactive television, and other related services.

The new division will coordinate company-wide video initiatives, AOLTW said, looking to parlay America Online (AOL) Internet access services into the growth of the Time Warner Cable system by offering these services via broadband. America Online Inc. and Time Warner Inc. merged in January of this year.

One of the main reasons the companies merged was to create new interactive consumer businesses, AOLTW CEO Gerald M. Levin said in a statement.

AOLTW said that consumers have rapidly adopted digital and high-speed services since the company upgraded its cable systems to broadband. The company began the upgrade a few years ago, and 90 percent of the system is currently digital, an AOLTW spokeswoman said Thursday.

As of June 30, the company had 2.5 million digital cable subscribers, representing a 182 per cent increase over the second quarter of last year, AOLTW said. In addition, AOL Internet access subscriptions climbed to 30 million members as of June 30, after adding 1.3 million new members in the second quarter of this year.

In order to take advantage of the thirst for high-speed services, the company said that it plans to roll out a variety of other initiatives, including the offering of multiple ISPs (Internet service providers) through Time Warner Cable, including EarthLink Inc., and a high-speed AOL service due to be launched in September.

In addition, the company is planning to unveil an enhanced version of the AOLTV service later in the year, as well as video-on-demand, HBO Subscription-Video-on-Demand and Cable IP (Internet Protocol) telephony.

Joseph J. Collins, the man tapped to convert the company’s cable division to broadband has been named chairman of the new Interactive Video division. Collins, who had been chairman and CEO of Time Warner Cable, will report to Levin. Time Warner Cable President Glenn Britt will succeed Collins as chairman and CEO of the cable division. Britt will be replaced by Time Warner Cable senior executive vice-president Tom Rutledge.

AOL Time Warner, in New York, can be contacted at online at