A handful of enhanced-TV suppliers specific to cable TV may
be in long-term trouble, given the momentum around the OpenCable digital set-top project.
Companies like WorldGate Communications Inc., Wink
Communications Inc., Interactive Channel, ICTV Inc. and others are all busy locking in
carriage agreements with cable systems. Most of them run on existing advanced-analog
set-tops, which may be their saving grace, MSO executives said.
"To me, all of those services are an interim step --
they're stopgaps," said Steve Craddock, vice president of new media for Comcast
He likened the existing enhanced-TV techniques to the early
days of stereo broadcasts, when consumers without stereo TV sets purchased and installed
stereo decoders in line between their set-top boxes and stereos so that they could enjoy
the fuller sound.
Over time, consumer-electronics companies integrated stereo
decoders into TV sets, making the decoder boxes unnecessary.
Plus, said Craddock and several other MSO executives who
preferred not to be quoted, many of the techniques developed by today's
enhanced-broadcast providers are duplicative with the types of IP (Internet-protocol)
services that will run on the advanced-digital set-top platform known as OpenCable.
"I just don't see how they can survive,
long-term," another senior MSO executive said about the enhanced-TV players.
But senior executives with the leading enhanced-broadcast
suppliers vigorously defended their futures last week.
First of all, they said, OpenCable boxes like General
Instrument Corp.'s DCT-5000 and the more muscular version of Scientific-Atlanta
Inc.'s Explorer 2000 are at least a year away.
"Digital and OpenCable will roll out, but expecting
them to hit 100 percent of all of the TVs in all the homes is a stretch," said Wes
Hoffman, president of ICTV. He added that most U.S. homes contain an average of 2.3 TV
sets, "and operators aren't likely to put advanced-digital boxes on all of
Hoffman described a strong market, with at least a 10-year
success window, for enhanced services that are slim enough to ride on the advanced-analog
boxes, bolstering the capabilities of other TVs in the home.
"It will become important" for operators to
pursue a hybrid approach for in-home electronics, meaning some mixture of advanced-digital
and analog set-tops, Hoffman emphasized.
During the time that elapses as the OpenCable boxes are
shined up, operators will likely want to experiment with the types of services that have
captured 325,000 consumer purchases and associated subscriptions to Microsoft Corp.'s
WebTV and WebTV Plus boxes, executives emphasized.
And most of them have already worked out agreements to work
inside the digital boxes.
Hal Krisbergh, president of WorldGate, noted that his
technology, because it is based in the headend, maps perfectly with a desire by MSOs to
control Internet content distributed to TVs.
"If you put the [Web] browser in the box,"
Krisbergh said, "customers could bypass the operator" when they're doing
things like e-commerce or responding to a narrowcast advertisement -- activities from
which operators could receive a financial cut.
Michael Harris, senior analyst with Kinetic Strategies
Inc., said both analog and advanced-digital platforms hold promise, depending on what MSOs
"There's a good argument to be made to keep
[browser and enhanced-content techniques] in the headend and to send it down to [analog]
boxes as a video stream," he said. "There are also reasons to put the
applications in the box."
But overall, Harris said, "the WorldGates and Winks
could find themselves standing right in the middle of the highway, looking at a bus marked
'OpenCable' that is bearing down to flatten them."
Krisbergh maintained that today's enhanced-analog
services are "completely complementary" with the OpenCable process, and he
hinted that he's in discussions with @Home Network as a player to help @Home shift
its personal computer-oriented content to TVs.
Meanwhile, Microsoft is not standing still. While it still
hasn't found a fat pipe to connect its content servers with its installed base of
WebTV set-tops -- currently, customers who interact rely on a dial-up line -- it is
planning a June upgrade for the boxes.
That upgrade will add an ability for customers to easily
control VCR recording and to beef up the on-screen menu, said Steve Guggenheimer, group
product manager for digital TV, during a recent briefing at Microsoft's Redmond,
On the bandwidth side, Craddock said, the MSO will likely
conduct trials of a speed-enhanced WebTV unit "this year."
"Microsoft is nicely positioned with WebTV,"
Craddock said. "We've said that we'll do some tests. It'll be this
In June, Microsoft will also start to blur the lines
between video to TVs and video to PCs when it rolls out "WebTV for Windows."
This means that PC-owners who buy slide-in TV-tuner cards for their computers can get
WebTV video for display on their TVs, Guggenheimer said.
Undeniably, the commercial plans of today's
enhanced-TV suppliers are gaining momentum. Three weeks ago, Charter Communications Inc.
launched the WorldGate service in its St. Louis system, reasoning that the technology is
an excellent alternative for subscribers who don't own PCs, but who want Internet
Last month, InterMedia Partners agreed to launch
Wink's enhanced-broadcast service in its Tennessee and Virginia systems.
Interactive Channel recently completed what was, by all
accounts, a successful commercial run of its service in Century Communications
Corp.'s Colorado Springs, Colo., system. Other carriage agreements are expected
shortly, Interactive Channel executives have said.
And ICTV saw a huge validation of its platform -- which
provides networked, interactive games to consumers -- in Cox Communications Inc.'s
Santa Barbara, Calif., system.
There, a six-month test showed that 10 percent of customers
within a 460-home node would spend $6.95 per month for TV-based Internet content and
And other MSO deals are "getting awfully close,"