An interactive spatialized audiovisual system links a plurality of remote used terminals. The system comprises a networked computer having an associated user database including user status information. Input means are provided at the computer for receiving a plurality of audio streams and associated locating data from the remote user terminals for, virtually locating the users relative to one another within a virtual user environment such as a chat room environment Selection means are provided for enabling selection of at least the first group of the audio streams in a first selection process based on status information in the user database. Output means output the selected group of audio streams and associated locating data for spatialization of the audio streams relative to a first listener-based audio reference frame which is substantially coherent with visual representations of the audio sources defined by the locating data at the first user terminal. Merging means are provided for merging at least some of the audio streams into a merged audio stream for transmittal to the first and other user terminal, with the merged audio stream being spatialized so as to provide for a spatialized background audio effect in the audio reference frame at the user terminal.