NEW YORK, December 2, 1998 — The vision of bringing a new level of television into the living room moved a step closer to reality this week with Microsoft’s announcement that it will offer a complete television software platform and associated services for the cable industry.
Microsoft is working with cable companies to develop interactive television as the cable industry moves from the analog into the digital realm. By incorporating PC technology and Internet capabilities into digital TV set-top boxes, the cable industry has the opportunity to offer a variety of services in addition to traditional television, including interactive TV programs and ads, on demand pay-per-view videos, electronic programming guides, interactive games, multimedia email and video conferencing.
To make it easier for cable companies to implement these services, Microsoft announced this week it will offer a complete digital solution for the cable industry. The solution includes the Microsoft WebTV television software platform developed specifically for cable companies, as well as the interactive television capabilities of Web TV and MSN Internet content and services. Microsoft announced its solution at the 1998 Western Cable Show in Anaheim, Calif., an annual conference that draws over 25,000 cable industry experts from around the world.
“Microsoft is committed to working with the cable industry as it makes the transition to digital television,” said Steve Perlman, president of WebTV Networks, Inc., a subsidiary of Microsoft. “Our goal is to help cable companies deliver enhanced services that will increase their profits and result in a richer television experience for millions of viewers.”
Microsoft’s WebTV television software platform and related services will create new business opportunities for cable companies as they enter the digital arena, said Steve Guggenheimer, Microsoft’s group product manager for digital television. “Cable operators right now are undergoing a change from an analog infrastructure into a digital infrastructure,” Guggenheimer said. “As they do that, they’d like to have new business opportunities to provide to their customers as well as new sources of revenue to help recover the cost of upgrading their networks.”
Microsoft’s WebTV television software platform for the cable industry combines Windows NT Server and Microsoft Commercial Internet System (MCIS) on cable company servers with the Windows CE operating system and Web TV technologies on viewers’ living room set-top boxes. Cable operators who want to integrate services into their networks can use the Web TV service to enhance traditional television offerings with features ranging from e-mail and Web browsing to searchable TV listings. They can also offer their subscribers Expedia travel information, CarPoint auto purchasing opportunities, Sidewalk entertainment listings and other products and services offered through MSN.
“What we’re doing is taking a set of technologies that we’ve made available to the cable industry individually and putting them together as part of a unique, integrated offering,” Guggenheimer said. “With our platform, cable operators can offer new services like video on demand and Internet services. Or if they don’t want to create their own services, they can just leverage ours and have a ready-to-go Internet for television service that’s already proven with over a half million users.”
Scientific-Atlanta, Inc., a major supplier of cable set-top boxes, has already signed up for a portion of Microsoft’s WebTV television software platform and services. A leading supplier of broadband communication systems, Scientific-Atlanta will integrate Microsoft’s WebTV Service into its Explorer 2000 set-top boxes. Scientific-Atlanta and Microsoft will also design a new set-top box that incorporates Windows CE based on the Microsoft WebTV television software platform.
“Scientific-Atlanta has had long-standing success in the cable industry, as Microsoft has had with software technology,” said Michael Harney, corporate vice president and general manager, digital subscriber networks of Scientific-Atlanta. “Together we have the necessary services, features and tools to support a long-term broadband service that will help (MSOs) multiple system operators serve their customers in a complete and customized way.”
With more than 65 million American consumers now subscribing to cable TV for their television services, Microsoft Chairman and CEO Bill Gates has predicted that the cable industry will “lead the way to providing information age services in all homes throughout the world.” The PC combined with the Internet “will connect up to cable and provide services that people would have never dreamed of in the past,” Gates told the cable industry in a speech to the National Cable Television Association earlier this year.
Microsoft’s work with the cable TV industry comes in addition to the company’s digital television partnerships with leaders in the computer, broadcast, satellite and computer electronics industries. By working with these leaders, Microsoft’s goal is to promote interactive television products and services and to speed up the adoption of digital television.
Microsoft’s work with the cable industry has centered on strengthening the Internet pipeline and paving the way for enhanced multimedia capabilities both on the TV and on the PC. In June 1997, Microsoft announced it made a $1 billion cash investment in Comcast, the nation’s fourth largest cable television operator. The investment, which gives Microsoft an 11.5 percent stake in Comcast, is aimed at helping Comcast upgrade its network to carry high-speed data and video services over its cable delivery network. This past January, Microsoft and Tele-Communications Inc. (TCI) announced that TCI will incorporate Windows CE and related Microsoft software into 5 million TCI digital set-top boxes.
And in June of this year, Microsoft joined with four partners-Time Warner Inc., MediaOne Group Inc., Compaq Corp and Advance/Newhouse-to invest in Road Runner, a high-speed online service delivered to the PC over the cable television infrastructure. Because it is based on a cable infrastructure, Road Runner can deliver data to the PC at speeds up to 100 times greater than that of residential telephone lines.
“The great work the cable industry has done working with consumers to provide services makes it a natural partner for Microsoft as we move forward into the next generation of digital television,” Guggenheimer said. “The cable industry is already moving into the digital space, and that evolution is going to continue. We’re really excited about being able to work with the cable industry during this great time of change.”