Compaq, Microsoft and Intel Announce Initiative To Work With Television Industry to Broaden and Accelerate Digital TV Opportunities

LAS VEGAS, April 7, 1997 — Three leaders of the personal computer industry – Compaq Computer Corp., Microsoft Corp. and Intel Corp. – today outlined their intent to work cooperatively with the broadcasting and cable television industries to realize the full potential of digital television (DTV) across a range of PCs, hybrid PC/TVs and digital TV appliances. Speaking at the 1997 National Association of Broadcasters Convention (NAB) in Las Vegas, senior executives from the companies described a broad vision of digital television in which the richness of high-resolution video and high-fidelity audio is married to the interactive content of the PC and the Internet.

The companies set forth technical recommendations, based initially on a subset of the Advanced Television Systems Committee (ATSC) specifications, that would greatly accelerate the transition to digital television in the United States. They also announced plans to equip millions of future personal computers to receive transmitted digital video and data as soon as fall 1998.

“We believe that by working together with the television industry, we can quickly develop an exciting future for digital TV,” said Bob Stearns, senior vice president of technology and corporate development, Compaq. “Digital television will allow each of our industries to deliver deeper, richer experiences to our customers. Tremendous performance advances – far beyond today’s view of television – will bring added value to customers and viewers through higher-quality pictures and sound, and from new information and entertainment data sources.”

“With the advent of the Internet, expectations of the viewing consumer audience are changing quickly,” said Craig Mundie, senior vice president of the consumer platforms group at Microsoft. “Working with the television industry, we have the opportunity to rapidly establish digital TV as the platform for a new wave of content that appeals to the viewer both for the high picture quality and for new ways of engaging in the program.”

“Intel’s efforts with the ATSC subcommittee over several months have brought broadcasting even closer to its digital future,” said Ron Whittier, senior vice president, content group at Intel. “We believe the PC is the future of broadcasting, and we want to work with broadcasters to create DTV with the widest range of options possible for consumers, including data transmission and interactivity.”

Free Market to Decide

In December 1996, following discussions between the television and computer industries, the Federal Communications Commission (FCC) issued a standard that allows for transmission of digital broadcast signals. Digital formatting provides cinema-quality pictures and CD-quality sound – a much higher-quality picture than the current analog format. However, the FCC agreed not to mandate which video formats were to be used in transmissions for digital television, saying that the free market should make that determination.

Enhanced Opportunities for Digital TV

The bolder vision of the future supported by Compaq, Microsoft and Intel provides potentially large new revenue opportunities for the television industry. At the least, a more engaging entertainment offering will attract additional viewers and corresponding advertising revenue. But perhaps even more promising are new revenue sources that can be generated from innovative programming and electronic commerce available only with the computer industry’s video formats, digital data services, and support for “intelligence” in the receivers. In addition, multimedia capabilities with progressive scanning will allow for the creation of broad new categories of programming.

Interactivity will enable viewers to play games, find out more about a particular program, engage in “chat” discussions about a story line or character, and delve deeper into a news story or sports event. And computer-style graphics and text linked to traditional forms of TV programming will bring a new level of personalization to viewing experiences, with custom information streams that can be added not just for each household, but also based on the individual preferences of different family members.

Together with the television industry, the companies believe they can accelerate the time when digital TV products are as commonplace as today’s analog television sets. This cross-industry effort is aimed at an approach to digital TV that fosters the highest-quality and most affordable digital television infrastructure in the shortest implementation time possible. Such an approach would provide greater flexibility to broadcasters, cable operators and equipment manufacturers, and would significantly lower consumers’ equipment costs.

“PCs and converged digital devices represent a key element of the television industry’s future revenue growth,” Mundie said. “The computer industry will deliver millions of ‘digital sets’ to the marketplace – as many as 100 million by 2005. In this time frame, hundreds of millions of sets and digital devices will be capable of receiving digital television signals – a ready-made audience. We believe the television industry will want to make sure it is reaching these viewers.”

Companies Bring Forth Digital TV Video Format Proposal

The proposal announced today by Compaq, Microsoft and Intel recommends a starting point for digital television based on a practical subset of the ATSC-specified video formats. The companies will work with the television industry to support higher resolutions, including 1080 progressive and above, all without causing any initial receiver to become obsolete. Since the initial format proposal is based on a proper subset of the ATSC specifications, all sets will be able to receive the proposed format, meaning there would be no risk to the television industry or consumers.

“This proposal represents a practical way for the television industry to initiate digital television service while providing a growth path to higher resolutions in the future, including 1080 progressive. In this way, the early investment of broadcasters and consumers is protected,” Mundie said. “The proposal is well-matched to the cost-effective availability of equipment such as encoders, receivers and displays.”

Specifically, digital broadcasts would be initiated using a high-definition 720p x 1280 progressive scan format for film-based materials, as well as standard definition formats in both interlaced and progressive modes. With advances in processor power, compression technology and display technology, it would be practical to enhance this initial “base layer” to offer 1080 progressive resolution and even higher resolution over time.

Television receivers would be substantially less expensive using this approach compared to sets using the full ATSC specification. “Because this approach aligns closely with the current generation of video decompression hardware and display technology, digital television sets could be offered at price points close to today’s analog sets, compared to the $3,000 to $5,000 HDTV sets that the traditional television manufacturers are planning,” said Stearns. “We think this makes more sense for the millions of consumers. The incremental cost of adding DTV reception to PCs will likely be as little as $100.”

A growing number of companies are lining up to support the computer industry’s standard for digital television, including C-Cube Microsystems Inc. of Milpitas, Calif. C-Cube Microsystems, the leading supplier of video compression solutions, endorsed the technical direction set today. Alex Balkanski, president and CEO of C-Cube, said, “This initiative marks an extraordinary step in accelerating DTV across multiple platforms and furthering the adoption of digital video worldwide. Anticipating demand for DTV systems, our DiviCom subsidiary is preparing to offer broadcasters the capability to make the transition.”

Millions of Future Consumer PCs to Receive Digital Video and Data Transmissions

“The first prototype DTV systems are expected by the end of this year,” said Whittier, “and we fully anticipate volume implementation of this new technical standard in the second half of 1998. By the year 2000, we expect all PCs shipped to be DTV receivers.”

Starting tomorrow at the annual Windows® Hardware Engineering Conference (WinHEC) in San Francisco, Compaq, Microsoft and Intel will be discussing plans to incorporate digital television capabilities into millions of future consumer PCs and PC/TVs that would be available as soon as the second half of 1998. The conference, which is attended by hundreds of PC manufacturers and related suppliers, sets the direction for what new technologies will be included in PCs in the next 12 to 18 months. Additional announcements will be made at Compaq’s semiannual Innovate Forum ’97 in Houston.

Compaq Background

Compaq Computer Corp., a Fortune 100 company, is the fifth-largest computer company in the world and the largest global supplier of personal computers, delivering useful innovation through products that connect people with people, and people with information. In 1996, the company reported worldwide sales of $18.1 billion. Customer support and information about Compaq and its products can be found at ( or by calling (800) OK-COMPAQ (652-6672).

Intel Background

Intel, the world’s largest chip maker, is also a leading manufacturer of personal computer, networking and communications products. Additional information is available at ( .

Microsoft Background

Founded in 1975, Microsoft (NASDAQ
) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Other product and company names herein may trademarks of their respective owners.

Compaq, Registered U.S. Patent and Trademark Office.

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