The competition among interactive-television services
heated up late last week, when United Video Satellite Group Inc. announced plans to form a
joint venture with Source Media Inc., which will bring to the partnership its
"Interactive Channel" and "VirtualModem" services.
The two companies plan to develop local content for a
yet-unnamed service, focusing on directory assistance, yellow pages, classified ads, local
sports and general news and information.
UVSG president and chief operating officer Peter C. Boylan
III said he expects the new service to be available to cable operators and their
subscribers sometime in the third or fourth quarter of this year.
Under the terms of the deal, UVSG will invest $12 million
for 842,000 shares of Source common stock. UVSG will also contribute $5 million in equity
to the joint venture, as well as an additional $5 million in convertible debentures.
In exchange, UVSG will initially own 45 percent of the
venture, with an option to increase that stake to 55 percent.
Boylan said no decision has been made yet on how the new
service will be branded, although the new local content will be linked to UVSG's TV
Guide portal on subscribers' television screens.
In addition to cable operators, the new service will also
be offered to satellite-television providers and digital-terrestrial broadcasters.
"We're platform-agnostic," Boylan said,
adding that certain video platforms might have bandwidth constraints and limitations with
Pricing to the operator and the consumer has not yet been