Windows in the living room
December 6, 1999
by Alex Lash
(IDG) -- WebTV's once-simple proposition – e-mail and Web surfing over the boob tube – has morphed into an embarrassment of multimedia riches. Its latest challenge: fending off a flood of competition in the interactive television market.
WebTV now offers digital recording, live pause, e-mail, Web surfing, program guides, interactive games, reminders and more – all bundled in various combinations. Some features are available only with cable service, others with satellite receivers.
"WebTV is a difficult product to explain in 30 seconds," says Joe Poletto, Microsoft's VP of network media.
Microsoft bought WebTV Networks in 1997 for $425 million. Since then, it has fought to move beyond the service's original positioning (read: e-mail for the grandparents) and bring down the average age (41) of its subscribers, which now number more than 900,000. A breakthrough came this fall, when Microsoft announced that Jeopardy and Wheel of Fortune were interactive and available through WebTV. But with such a small customer base, Microsoft has to provide extra ads and other incentives, which Poletto calls "barter-in-kind."
While market analysts are bullish on interactive TV, it remains to be seen which form factors will attract users. Competitors like TiVo, which makes a digital recording device that plugs into a cable subscriber's TV, say simple is better. Microsoft contends TiVo's capabilities should be part of a broader product. "Everyone will start including it in their product line, and it will become a commodity, just a feature," says WebTV cofounder Phil Goldman, who now oversees Microsoft's TV technology development.
Even if WebTV never becomes a smash hit, Microsoft will use it as a test bed for underlying Windows technology as computing moves beyond the PC. The software giant urgently needs to find new markets for Windows; digital TV boxes and other Net appliances are a prime target. So far, Microsoft has bought its way into cable boxes. All of the big licensing deals for Windows CE have also involved significant Microsoft investment – the biggest being a $5 billion deal with AT&T, now the largest U.S. cable company.
In the end, Microsoft might be happy doing what it claims it does best: providing the underlying technology for others to build digital applications.
Should the Internet replace phones as the polling technology of choice?
RELATED IDG.net STORIES:
QuickTime Brings TV to Your PC
|Back to the top||
© 2001 Cable News Network. All Rights Reserved.|
Terms under which this service is provided to you.
Read our privacy guidelines.