Microsoft Shows NATPE Visitors the Future of Interactive Programming with WebTV Service

NEW ORLEANS, Jan. 26, 1999 — Visitors here at the National Association of Television Program Executives (NATPE) ’99 can see the future of interactive television programming by way of WebTV Networks, Inc., a subsidiary of Microsoft Corp. The company is showing off its broadest-ever range of WebTV services and products – including versions for satellite, cable systems and Windows PCs. It also is announcing new programming partners, and sharing impressive sales and subscription figures.

Demonstrations at NATPE highlight the participation of television producers, networks and advertisers using Interactive Television Links for WebTV, including Discovery Channel Interactive, Documentary Channel, Saturday Night Live, and USA Networks’ World Wrestling Federation. The demonstrations also show off these WebTV products and services:

  • WebTV Network Plus Service for Satellite and the EchoStar Model 7100 Satellite Receiver, the world’s first Internet TV service available through satellite, allowing subscribers to watch what they want, when they want it. The new service and receiver – to be available this spring – will revolutionize TV viewing by integrating the Dish Network’s digital satellite video with the WebTV Network’s Internet TV experience. The result will bring WebTV services within reach of millions of people.

  • WebTV for Windows , which allows users to benefit from the integration of traditional television technologies with the PC. This feature of Windows 98 lets users watch traditional television broadcasts, while integrating broadcast and Internet data reception, to expand the range of information they receive on their PCs.

  • WebTV Plus System , which comprises the WebTV Plus Receiver (distributed by U.S. licensees Sony electronics Inc., Phillips Consumer Electronics Company and Mitsubishi Consumer Electronics America), a remote control, optional keyboard and the WebTV Plus Network service. It allows subscribers to surf the Internet and watch television at the same time.

  • WebTV Network Service for customization and use on the Scientific-Atlanta Explorer 2000 advanced digital set-top box and digital interactive network. Cable operators can offer the service seamlessly integrated with cable video programming through standard set-top boxes. Cable operators can co-brand the service and add specific content for a unique, customized offering that can include searchable TV listings, e-mail and Web browsing.

WebTV CEO Steve Perlman said the spark for WebTV came to him in 1995, when he noticed consumer products promoted via a Web site, and realized that the Internet lacked the ease-of-use and low cost that would make it a mass-market means of communications.

“I went to Fry’s electronics in the summer of 1995, brought home $3,000 worth of electronics and tried to get the Internet to work on my TV,” recalled Perlman, who developed multimedia and video technology for the Macintosh and explored the use of television to increase the interactivity of game systems. “After working 72 hours straight, I got the Internet to display on the TV and called my buddy Bruce Leak (a co-founder and now WebTV Service general manager) at 3 a.m. I talked him into coming over. He saw what I’d done and, when I told him I hadn’t done anything to the TV, but rather to the signal going into the TV, we both realized we needed to start a company.”

That fledgling company worked out of Perlman’s house and then out of the house of Phil Goldman, company co-founder and senior vice president of engineering, before moving into a former BMW dealership and garage in Palo Alto. The company assumed the alias of Artemis Research to avoid tipping its hand, and even put up a Web site describing itself as a research facility for sleep deprivation studies on humans and dwarf rabbits. The sleep deprivation studies may have been incidental, but the rabbit was real: Bowser, the resident mascot, courtesy of Phil Goldman. Pets continue to play a major role at WebTV, with products, components and even conference rooms named after the animal companions of WebTV employees.

The following year the company was re-christened “WebTV Networks” and, on July 10, 1996, it announced and demonstrated the first working WebTV Internet Terminals from Sony and Phillips. It promised and delivered products on the shelf in time for the 1996 holiday shopping season.

WebTV continues to deliver. It’s already the world’s most popular Internet TV offering, and it’s still growing. With about 700,000 WebTV terminals and 1.5 million regular users, the 2-plus year-old WebTV service is growing faster than previous consumer electronics innovations including cell phones, VCRs and CD players, and is second in early adoptions only to the DirecTV satellite service. WebTV Internet terminals and receivers are now sold in thousands of retail outlets including Walmart, K-Mart, Circuit City and the Good Guys and over television via the Home Shopping Network. Sony, Phillips, Mitsubishi and Samsung all make or distribute WebTV products.

Where is WebTV heading? Perlman said the answer to that question lies in what consumers and the industry have said they want. That means more communication, information and interaction with TV, including digital video recording and video-on-demand capabilities.

“WebTV features will appear in a variety of TV products – set-top boxes or televisions – across all types of delivery systems, including analog, cable, DSL, satellite and digital terrestrial,” said Perlman. “Consumers want what they want when they want it, and WebTV is partnering with the industry to give it to them.”

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