Interactive entertainment may be the wave of the future, but it seems that future is taking a bit longer to get to than expected. And some are now feeling the pain.

ExtendMedia, one of Canada’s foremost itv pioneers, has laid off one-quarter of its staff. With roughly 160 people working among its Toronto, New York and l.a. offices, the company let go about 40 people from its Toronto flagship operation.

The job cuts, announced Nov. 6, were made ‘in areas that would least impact our client interface,’ says public relations manager Caroline Verboon.

According to one industry observer, cost-cutting is ‘nothing endemic to ExtendMedia in particular. The market’s cooled out for the big dot-coms and entertainment companies – it’s happening all over the place.’

None of the company’s key executives was let go.

‘It’s important that the industry understands this reorganization will strengthen ExtendMedia’s leadership in interactive entertainment over the long term. And in order to meet our business objectives, we had to make the difficult decision of reorganizing the company. Unfortunately, this included staff reductions of approximately 25%,’ states Keith Kocho, founder and ceo of ExtendMedia, in a statement.

‘This is the danger of [working] in such a new and young industry,’ says the observer.

ExtendMedia is the force behind the interactive components in the cbc series Our Hero and Drop the Beat, one of the first tv programs in the world to converge six different media.

Among ExtendMedia’s myriad shareholders, Alliance Atlantis Communications has a 10% interest and bce holds a 25.5% stake.

‘At this point we’re just watching and taking our lead from [ExtendMedia] management. With 10% ownership, it’s an investment like any other,’ says Alliance Atlantis aac spokesman Ted Barvakis. *

-www.extend.com