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OpenTV, HITS Linkup Could Aid Small Ops

7/29/2001 8:00 PM Eastern

OpenTV Corp. is close to signing a deal with Headend in the Sky that would let the company tap into HITS' satellite transponders to deliver virtual interactive channels to cable operators.

OpenTV also hopes to use the deal to entice HITS' programming affiliates to author enhanced-TV programming using its software, all in the name of providing a taste of interactivity to smaller cable operators.

"We're in discussions with HITS with the intention to deploy games, information-on-demand and commerce services," OpenTV chief operating officer Jim Ackerman said last week. "This will enable small operators to deploy interactivity."

AT&T Broadband spokesman Andrew Johnson said last week that HITS and OpenTV have yet to sign such a deal.

"HITS is always looking at how we can better use digital capabilities, including in the interactive space," he said.

Johnson also noted that AT&T Broadband's is to not tie itself to any single technology vendor, pointing to set-top software work the company is has done with OpenTV competitors such as Liberate Technologies Inc. and Microsoft Corp.

OpenTV is widely deployed abroad, and its users include News Corp.'s British Sky Broadcasting Group plc direct-to-home satellite service. But its U.S. deployments are largely through EchoStar Communications Corp, which now counts more than one million subscribers with access to OpenTV.

Last week, Open TV showed off its lone U.S. cable deployment — in USA Media Corp.'s Half Moon Bay, Calif., system — to attendees at the Cable & Telecommunications Association for Marketing Summit, held in nearby San Francisco.

The set-top middleware provider hopes cable program networks will write OpenTV-powered TV applications for the HITS platform.

"Discovery Network has enhanced TV with its Dinosaurs
special," and Game Show Network also is writing advanced applications for the OpenTV platform, Ackerman said.

OpenTV hopes to close the deal in the next few weeks and begin trials in the fourth quarter. A source familiar with the deal said last Wednesday (July 25) that the deal could be announced as early as Aug. 6.

An OpenTV deal with HITS could carry possible ITV implications for AT&T Broadband, a HITS corporate cousin and its largest MSO affiliate.

Just prior to June's National Show, word emerged that AT&T Broadband was scaling back ITV plans for the thick-client DCT-5000 box, opting instead to squeeze all it can muster from the more than 3 million DCT-2000s it has already installed. The plan is to follow that up with a new, enhanced digital set-top for more advanced applications and services, such as personal video recording.

Of course, a HITS deal would provide OpenTV with a digital avenue that extends beyond AT&T Broadband. Such an accord would also give the company a potential HITS footprint that is tied to 200 MSOs and about 2,000 cable headends.

The complementary HITS2- Home platform is geared to enable rural operators to offer tiers of digital programming without expending lots of money on additional headend equipment.

In the HITS deal, OpenTV expects to download its middleware to thin-client, DCT-2000 digital boxes already deployed by HITS affiliates, said Michael Collette, senior vice president of marketing for Open TV.

"Day two, we transmit applications through the channel to the set-top," he said, which could be news, weather and gaming virtual channels from providers such as AccuWeather and Bloomberg LLC.

"That's the broadcast model," Collette said.

The second phase will see commerce and transactional services downloaded to servers deployed in HITS headends, he said. That would allow for enhanced TV services and transactional services to be deployed.

The HITS deal would give Open TV its second deployment channel in the U.S. USA Media currently has 12 subscribers testing the service, but Open TV and the operator plan to eventually roll it out to about 3,000 digital subscribers with DCT-2000 boxes. USA Media has 10,000 subscribers system-wide.

Built for the Half Moon Bay system, the service showcases six categories: games, local information, shopping, "fun stuff," news and information and messages (instant messaging and electronic mail). The gaming category houses nine parlor-type games, such as Solitaire and a basketball game called "Dunk." The games are distributed from a carousel at the headend in broadcast form, Collette said, eliminating any problems with contention on the network.

The local-information slot includes a local dining and movie guide, weather info, an events calendar and lottery information.

The shopping category involves a CD store and a local pizza shop. Subscribers can order pizza via the TV. The cable systems' server automatically faxes a pizza request to the shop for delivery.

Other retailers will be added soon, Ackerman said.

The "fun stuff" category includes horoscopes and soap opera information. News and weather relays sports scores, weather and financial news from Bloomberg.

The lineup gives consumers a blend of national and local information and entertainment. "The power of interactive TV is to be relevant locally," Ackerman said. "As operators get bigger they can't lose that sense of being a local operation."

Currently, the interactive service is free to all digital subscribers. Ackerman said that's a key selling point for advertisers and retailers, who want their products and services to reach as large a base as possible.

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