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SeaChange, Microsoft to Link Cable Spots to Web

10/18/1998 8:00 PM Eastern

Cable advertisers will soon be able to link their local
commercials to the Internet, now that SeaChange International Inc.'s digital
ad-insertion system will be joined with "Interactive Television Links," a
technology developed by Microsoft Corp.'s WebTV Networks unit.

This hyperlinking technology will enable connections to the
Web without requiring new technology or significant new costs for cable operators,
SeaChange said in its announcement. And it will mean a new revenue opportunity for
operators, added Joe Poletto, vice president of ad sales and strategic partnerships at
WebTV.

James Kelso, director of advertising systems at SeaChange,
said in an interview late last week that the vendor "will be showing this at the
Western Show [in early December], and [it will] have it available to customers very
shortly thereafter" -- at some point during the first quarter.

To add Interactive Television Links to a local spot, cable
operators need to enter a Web-site address while digitally encoding the spot for the
SeaChange insertion system, Kelso explained.

WebTV subscribers will then see Interactive Television
Links' "I" symbol in a corner of their TV screen, which will connect them
to, say, a Ford Motor Co. auto dealer's Web site offering price information and
greater detail on specific models, he added.

Because "many of our customers are beginning to sell
Web advertising, as well as cable advertising, including many MSOs," Kelso said, this
new SeaChange/WebTV agreement can spur new ad sales for them. Clients and agencies will
now be able to update details or provide additional information much quicker and easier on
the Web than in a commercial, he added.

SeaChange also sees this new technology as giving impetus
to the growth of addressable advertising. As William Styslinger, SeaChange's
president and CEO, put it in the WebTV announcement, "Interactive Television Links
are a major advancement toward what we believe to be the television end-game -- a totally
personalized viewing experience."

Automotive, accounting for about 30 percent of
operators' ad revenues, will be among the first categories targeted by operators,
Kelso predicted, along with the entertainment and restaurant segments.

WebTV -- also available via Sony Corp., Philips Consumer
Electronics Co. and other resellers, as well as in 10,000 retail outlets -- currently has
about 500,000 subscribers, chiefly in the United States, Poletto estimated. WebTV is now
packaged in personal computers with Microsoft's Windows 98, as well.

"Our system has always been Windows-based," Kelso
said, "so this is a natural bridge." The hyperlinking technology is such "a
straightforward application" that there's no need for preliminary testing by
MSOs or advertisers,he said.

This agreement, for which no money changed hands, is only
the beginning, SeaChange asserted.

"Down the road," Kelso predicted,
"we're looking at hyperlinks to video-on-demand systems."

SeaChange has also been talking with WorldGate
Communications Inc. about hyperlinking, and Kelso said, "We're committed to
working with them, too."

Moreover, he saw potential tie-ins with Wink Communications
Inc.'s interactive-advertising applications.

For WebTV's part, too, the SeaChange agreement is just
a start. When asked if WebTV had also talked with other insertion vendors, like SkyConnect
Inc. and Channelmatic/LIMT, Poletto said, "There are ongoing conversations with other
vendors. We want to make this as widespread as possible."

SeaChange estimated that its ad-insertion system delivers
about 1 million spots daily worldwide, via 15,000 channels -- mainly cable, and mainly in
the United States.

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