Year 2000: The Breakout Year for Rolling Out Enhanced TV to Consumers Worldwide

NEW ORLEANS, May 8, 2000 — An explosion of interactive content is coming to television with the help of new technologies, known as the Microsoft TV Platform. Microsoft TV is being used as the foundation for a number of Enhanced TV solutions currently in development by some of the world’s largest cable operators such as AT & T Broadband in the United States, UPC in Europe and Rogers in Canada. The platform is scheduled for release to cable and satellite TV companies later this year. Television will no longer be just for watching.

“It will create new ways to have fun while you are watching TV,”
said John DeVaan, senior vice president of Microsoft’s Consumer Group.

Industry support for the Microsoft TV Platform continues to grow. At this week’s National Cable Television Association’s (NCTA) Cable 2000 show, Microsoft announced that more than 100 companies are developing enhanced television solutions based on the Microsoft TV Platform. The company also announced that it has expanded its TV platform to offer cable operators and hardware manufacturers more flexibility when building interactive television solutions.

Microsoft TV is a software platform for enhanced television. It will perform the critical job of coordinating the software and hardware systems, enabling interactive content to work on almost any TV set. Microsoft TV will work with existing digital set-top boxes, as well as a wide range of TV-based appliances — next-generation advanced set-top boxes — which will offer amazing functionality at a very reasonable price, enabling a user to combine a cable box, VCR, home networking hub and more, into a single device — integrated televisions sets, personal video recorders and combination devices. The platform supports a broad menu of new TV applications, including multiplayer gaming, shopping, e-mail, chat, pay-per-view, video-on-demand, personalized advertising and Internet access.

The Microsoft TV Platform offers three advantages over regular TV by delivering a true Enhanced TV experience.

First, viewers can turn their television into a secondary device to access the Internet for email, information, multiplayer games as well as using the television as a central hub for home networking. A group of friends, for example, can communicate with each other on the screen using instant messaging as they watch a football game or sitcom separately in their own homes. Microsoft TV can help viewers search the Yellow Pages, make travel arrangements, scan classified advertising and conduct e-commerce with a point and click of the remote or a wireless keyboard — there is no mouse.

“Any ad that says to call a toll-free number for a brochure, or send $24.95 for a set of Bach CDs, now will say you can get that brochure, or pay your $24.95, with one click,”
DeVaan said.

Second, viewers can enjoy interactive TV programs, including game shows like Jeopardy, news and sports programs such as those offered by NBC and MSNBC, or movies and music from almost unlimited selections. New channels will arrive, as will new sources of streaming media and even richer Internet content.
“The field is limited only by the imagination of the artists who produce the content,”
said Paul Mitchell, senior manager for Interactive Content and Standards for the Microsoft TV group.

Finally, viewers can take advantage of the newest way to watch TV by using the
“personal TV”
“Personal TV”
enables viewers to more easily choose from the wide range of programming, through the use of a sophisticated electronic programming guide, and create their own personal channel selections. One of the hottest new features to hit TV is the Personal Video Recorder, or PVR. PVR support, which is built into Microsoft TV, lets a viewer pause live TV programs, as well as select and digitally record programs with little fuss and much better quality than is available with a conventional VCR.

“Microsoft TV will allow you to have personal control over your television by giving you the ability to set shows to record and play on your schedule,”
Mitchell added.

Microsoft TV — which is sold not to consumers, but to cable and satellite companies and manufacturers of TV devices such as set-top boxes — is expected to revolutionize the way the TV industry does business. It will help create
“a ton of opportunities and new revenue streams for our partners,”
DeVaan said.

These new revenue streams created by Microsoft TV will benefit cable operators, who can offer new tiered and on-demand services, with a charge for higher levels of service.
“They could have a free level, and then charge extra for more programming or information,”
DeVaan said. The revenue streams will also benefit online retailers, who will find new sources of sales and commissions, and advertisers, who will find new ways to connect one-on-one with the customer.

People who create entertainment content also stand to benefit.
“It is likely that new types of TV channels, either with interactive features built in or entirely new pay-per-view-like channels offering a wide range of music, videos, movies and educational programming, will be developed,”
DeVaan said.
“These are the interactive HBOs and Showtimes of the new millennium.”

Though most of these types of services have yet to be developed, the Microsoft TV Platform will remove the technical roadblocks that until now have inhibited innovation. So far, without widely available technologies, the television industry has been reluctant to devote resources to developing interactive content. But when the technology becomes available, entrepreneurs will have plenty of incentives to find ways to profit from it.

Microsoft has been actively working with content developers, helping them bring enhanced TV products and content to the market.
“All these people needed to be helped so that the age of enhanced TV can come true,”
DeVaan said.
“Microsoft has been working for a long time to make the whole enhanced TV industry come true. Our direct contribution has been not only in creating the software that enables these new services, but also in evangelizing, supporting and training the third-party community that wants to take advantage of the Microsoft TV Platform and realize the benefits of enhanced TV.”

Consumers, meanwhile, can get a taste of the enhanced TV experience today by using Microsoft Web TV Plus, or the EchoStar DISHPlayer for WebTV.
“The Microsoft TV Platform incorporates technologies of WebTV and benefits from the learning and experience we’ve had running WebTV, the leading enhanced TV service in the world, for more than four years now,”
added DeVaan.

“The Web TV service has pioneered the enhanced television experience for consumers,”
said Rob Schoeben, senior director of product and corporate marketing for Web TV.
“The arrival of Microsoft TV means that WebTV will be able to bring new content to its service more quickly. Software engineers will have a standardized platform on which to develop content. They won’t have to worry about writing code for media players and other system files; instead they can spend their time building new products.”

WebTV’s new products will be based on Microsoft TV technologies. And as Microsoft TV expands in the marketplace, WebTV will become more portable.
“Originally, we had to create our own network to deliver our service,”
Schoeben said.
“Now we can target our service anywhere Microsoft TV goes. There is no reason why a network operator cannot deliver one or more of our WebTV services. It extends the reach potential for our services.”

Schoeben said Microsoft built the new platform on Windows CE and open industry standards, a factor that is likely to help spread its popularity.
“It’s a common infrastructure people are used to,”
he said.

Mitchell said Microsoft did encounter some challenges in developing Microsoft TV.
“It’s been one step at a time,”
he said.
“This is stuff that’s complicated. It involves working with many hardware vendors and all the people implementing and operating cable and satellite networks.”

Besides building the system, Microsoft had to make sure it didn’t cause new problems with existing technologies,
“so you’re not messing up what’s already there,”
Mitchell said.

Microsoft announced the development of Microsoft TV in May 1999 and invested $5 billion in AT & T, one of the nation’s largest cable television providers and the largest long-distance telephone company, to help advance the availability of these new enhanced TV services. AT & T is using the Microsoft TV Platform and its two main components — client software for the set-top box and server software that manages distribution of these services over cable, satellite and even terrestrial networks — to deliver enhanced services to its subscribers.

To date, leading digital network cable systems have committed to deploying more than 14 million units of Microsoft TV software in set-top boxes on their networks.

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