Windmill Group, the independent, media-orientated subsidiary of Windmill Lane Studios, the recording facility used by U2, has started a "digital communications agency" called Windmill.

The division will handle new media projects for customers, providing a mix of Internet, DVD (digital versatile disk), CD-Rom and video delivery options.

Creating digital television content - projects that can be delivered over the Internet or on interactive television - is also under consideration. While the company has been producing websites and other digital content for clients during the past year, Windmill Group management decided to separate the digital division into its own operation.

"With the advent of the Internet and associated offline media like DVD, we realised our clients were looking for digital services," said Mr John Ingram, Windmill Group managing director. "We decided to formalise what was there into Windmill."

Windmill is pitching itself as an agency rather than a Web development house because it sees itself as an overall communications agency.

"The Web is driving a lot of what we're doing, but the need for basic business communication hasn't gone away with the arrival of the Net," said Mr Ingram.

Because the company has worked for several years developing television and film advertisements for traditional advertising agencies, Mr Ingram feels Windmill will be seen as an "agency-neutral" provider of digital services to agencies rather than as a competitor.

While the new media division is relatively young compared to some of its larger competitors, the company aims to use its brand name and relatively trendy connotations to ensure that it attracts new domestic and international clients.

In addition to other European work, Mr Ingram noted that Windmill already had a continuing £1.5 million (€1.9 million) anchor project managing an online intellectual property rights' database for the European Commission.

He said the company was also talking to potential American clients.

The company will focus on developing an interactive television unit, in anticipation of the growth of digital television in Ireland and abroad.

Mr Ingram said Windmill would focus initially on producing commercial work, but planned to expand into broader content development as well.

With the addition of Windmill, the Windmill Group now has five divisions and employs more than 100 people. These divisions are:

Windmill, the digital communications agency;

Windmill Lane Pictures, the post-production facility;

Windmill Luxembourg, which provides communications support for the EC Intellectual Property Rights project;

FilmHouse, the 3-D animation and special effects section;

Leinster House Television, which provides coverage of the Dail and Seanad.