EchoStar Communications Corp. confirmed plans last week to
incorporate interactive technology from OpenTV Inc. in its next generation of
direct-broadcast satellite receivers.
EchoStar also said last week that it has signed a letter of
intent to purchase Media4 Inc. -- a privately held supplier of broadband
satellite-networking equipment for personal computers -- for approximately 400,000 shares
of common stock.
Starting in the first half of next year, EchoStar plans to
offer its Dish Network subscribers new interactive services delivered to the TV, including
e-mail, online banking, sports statistics and links between TV shows and related Web
EchoStar will deliver similar interactive services to PCs.
The company already offers two niche data services to the PC.
According to Mark Jackson, senior vice president at
EchoStar, the interactive-television service won't require the expensive set-top
boxes that some cable operators plan to deploy for such services. Jackson said EchoStar
started production last week on new DBS set-top boxes that are capable of downloading
OpenTV's software applications.
In addition to the seven-year technology-licensing
agreement with EchoStar, OpenTV will also design interactive applications for
EchoStar's new service. OpenTV has already developed similar applications in Europe,
such as electronic programming guides enhanced with movie trailers.
OpenTV CEO Jan Steenkamp said the company has been in talks
with a number of key broadcasters -- including NBC, ABC, Home Box Office and ESPN -- to
develop interactive-television services, as well as with potential retail partners,
including Citibank, for possible e-commerce ventures.
No deals have been signed yet, but Steenkamp said he
expected to "start leaking these one by one" over the next 30 to 60 days.
Although the technology has been proven in Europe, where
more than 1 million set-top boxes incorporating OpenTV technology have already been
deployed, many potential partners were waiting until OpenTV secured a U.S. distribution
platform before they negotiated a deal, Steenkamp explained.
"A lot of people have been talking about interactive
television for quite some time," Jackson said. "We're actually doing
The deal gives OpenTV a nationwide U.S. distribution
platform that Steenkamp hopes will serve as a catalyst to attract business from other
In addition to cable operators, OpenTV has been in talks
with WorldGate Communications Inc., Diva Systems Corp., United Video Satellite Group
Inc.'s Prevue Networks Inc. and Interactive Channel.
"It has been very difficult to put into a slide show
what the ideal interactive experience is," Steenkamp said.
Some new services, such as interactive banking, will be
introduced under specific brand names, Jackson predicted. But for others, the
interactivity will be added as a layer under existing programming on sports and
Jackson admitted that he doesn't think that there is a
huge pent-up demand for interactive services today.
"I think that the demand will come," he said.
EchoStar is going forward with such services, he added, as a way to differentiate Dish
Network and to make it more competitive with cable.
"We don't do a lot of focus groups," Jackson
admitted. "We do it from the gut, and our gut feeling is that this is the way to go,
and that this will increase our revenues."
Current Dish Network receivers in consumers' homes
will not be able to download the OpenTV technology, Jackson said, although the new
receivers should be on the market soon. He expects Dish Network subscribers who want
access to the interactive services to buy new receivers and relegate the old ones to
Different interactive services will be available at each of
EchoStar's three orbital locations. The services will eat up some additional
Jackson and Steenkamp were quick to say that the
interactive services would differ from current Internet-over-television services.
"This is broadband," Jackson said. "We can
get a lot more information out to consumers and deliver a lot more fun."
He added that the new set-top boxes would have e-mail and
Specific services and prices have not yet been released.
Some of the new services will be transaction-based, rather than sold through
subscriptions, Jackson predicted. In some cases, EchoStar will receive fees from services
that want to gain access to the Dish Network DBS platform.
Neither EchoStar nor OpenTV is a member of the Advanced
Television Enhancement Forum.