Q&A: Comcast, Microsoft Execs Discuss First Commercial Deployment of Microsoft TV Foundation

REDMOND, Wash., Nov. 8, 2004 — Microsoft and Comcast have announced the first commercial deployment of Microsoft TV Foundation Edition, a digital cable software platform that Comcast will begin rolling out on November 15 in the state of Washington. Comcast is changing the way people watch television by offering customers more value, choice and control through advanced digital cable offerings including VOD, DVRs and HDTV. Microsoft TV Foundation Edition will improve the overall digital TV experience for consumers by helping them navigate through all of the choices they have to find what they want, when they want it. The announcement was made at a special launch celebration held at Microsoft’s headquarters here today.

The deployment marks a key milestone in Microsoft’s revamped digital TV software efforts, initiated in 2002 when Moshe Lichtman joined the Microsoft TV Division as corporate vice president. PressPass recently sat down with Lichtman and Mark Hess , senior vice president of digital television at Comcast, to talk about this deployment and its significance to consumers, Microsoft, Comcast and the digital TV industry.

PressPass: Today is an exciting day for Microsoft TV and Comcast. Tell us what has been announced, and why this is so significant to your companies.

Lichtman: We’ve announced that Comcast will give more than 1 million cable customers here in Washington state access to advanced digital cable services powered by Microsoft TV Foundation Edition software. In addition to being the first Comcast deployment under the 5 million-unit deal announced in May (see Related Links, right), this rollout also marks the first large-scale deployment of Foundation Edition in the U.S. and clearly demonstrates our success in providing network operators with software that powers compelling new services such as video-on-demand, digital video recording (DVR), high definition TV, games and interactive information services and more.

Mark Hess, Senior Vice President of Digital Television, Comcast

Hess: With this announcement, we’re taking our relationship with Microsoft to the next level, and we are glad to have Microsoft supporting us as we continue to roll out enhanced digital cable services to our customers. The deployment of Foundation Edition also marks the launch of dual-tuner digital video recording (DVR) services for Comcast customers in Washington state. With this great new service, our customers enjoy the ultimate control of their home entertainment experience, as they can record their favorite programs digitally — including programs in HD — pause & rewind live television broadcasts at the touch of a button, and build a customized list of recordings by using the DVR’s repeat-recording capability to record multiple episodes of favorite shows. This amazing choice and control is representative of the advantages of our upgraded cable network and our commitment to providing our customers with innovative products and services.

PressPass: How does the software work? Do consumers need to go out and buy anything?

Hess: Comcast customers who sign up for the DVR service will receive a new digital cable set-top box. Customers who already lease a digital cable set-top box capable of delivering HDTV will pay an additional US$4.95 per month for the new DVR service, while all other customers will pay an additional $9.95 per month. Microsoft TV Foundation Edition will be made available to all Comcast Digital Cable customers. The software will be automatically downloaded to the set-top boxes over Comcast’s digital network in phases over the next few months. Comcast’s digital cable customers will wake up one morning to a new digital cable experience that improves their ability to find and manage the programming and on-demand content they’re looking for.

PressPass: How did this deployment come about?

Lichtman: Microsoft and Comcast have a long-standing relationship, going back several years. About two years ago, we started talking with Comcast about developing software to help deliver a better consumer experience for advanced services like VOD, DVR and high-definition TV. In response, we developed Microsoft TV Foundation Edition. Comcast concluded a very successful trial of the new solution in Seattle earlier this year, and in May they licensed 5 million units of Foundation Edition. We’re excited that we’ll be among the first consumers in the U.S. to enjoy this enhanced service as Comcast deploys it here on Microsoft’s home turf of Washington.

PressPass: What was some of the feedback from trial participants?

Hess: Consumers loved the added convenience that DVR gives them, in particular the ability to record two shows at the same time or watch one show while recording another. Research shows that U.S. adults spend more than four hours watching TV each day. So as a cable provider, our job is to provide our customers with more choices and more control over their TV viewing. The advanced DVR interface and controls available with Foundation Edition were really popular among the people who participated in this trial. The software lets consumers see where they are in a recorded program. It also lets them record a show from the beginning even if they are well into the program when they decide to start recording.

Our trial participants also were impressed by the overall speed and performance improvements of the Microsoft TV interactive program guide (IPG). Microsoft TV has a clean user interface, easy search and navigation features and easy access to on-demand titles. They loved the new look and feel of the service and the fact that it made the TV watching experience easier and more enjoyable.

PressPass: How does Microsoft TV Foundation Edition benefit Comcast?

Hess: Foundation Edition enables us to tie together all of today’s digital cable services in a way that is intuitive and easier to use for the consumer. VOD, DVR, HDTV, on-demand news, weather and sports — they’re all presented in a logical, easy-to-use way within the interactive program guide. With Microsoft TV software, we can help consumers find what they want, when they want it. That increases our ability make the service more valuable for customers and to earn more revenue by helping customers find more of what they want. It’s a win-win situation.

PressPass: Can you explain how Microsoft TV Foundation supports Comcast’s DVR service?

Lichtman: Sure. Foundation Edition actually represents our fifth generation of DVR technology. DVR support includes many features that make it easier for the consumer to take control of their recorded content. First and foremost, Foundation Edition supports dual-tuner functionality, meaning it lets the viewer record one show while watching another or record two shows at the same time. It also has something called “smart series recording,” which gives the consumer a lot of control over how the DVR records TV series. Let’s say you’re a big fan of “The West Wing.” With Foundation Edition you can tell the DVR to record only the new episodes, or all new episodes and reruns, or any occurrences of “The West Wing” on any channel.

Foundation Edition’s DVR controls are also smart enough to handle schedule changes. So if your favorite show gets bumped to another time slot, you don’t need to reprogram the DVR. And as Mark mentioned, Foundation lets a user decide to record a show from the beginning, even after they’re into the show by as many as 90 minutes.

PressPass: Which other services and functionality will Comcast offer its Washington state subscribers as a result of this rollout?

Hess: Well, as one example, we’ve found that consumers with high-definition TV love it so much that it changes their viewing habits. Viewers often watch a show that’s in HD when they wouldn’t necessarily have watched it in standard-definition. That’s a powerful testament to the attraction of HDTV. Comcast offers a lot of HD programming and we need to help customers easily find out what shows are available in HD. Foundation Edition aggregates HDTV listings into a single place on the guide, giving customers access to all the HD programming available with one button press on the remote control.

Foundation Edition helps us improve the overall guide experience. In addition to its attractive interface, with Foundation we can display TV listings for up to two weeks in advance. And the guide integrates the DVR functionality throughout all categories. So for example, our customers can program the DVR from almost any area in the guide, whether they’re looking at the guide listings, or finding a show via the search feature.

PressPass: How does this announcement affect Microsoft’s position as a software supplier to the cable industry?

Lichtman: Comcast is the country’s leading cable operator, and we believe this deployment demonstrates our success in developing innovative software that adds value for cable operators and their customers. We expect the cable industry will continue to look to Microsoft for innovations that improve the cable TV experience for millions of viewers. It’s an exciting challenge.

PressPass: How important is this rollout to Comcast’s plans for its customers nationwide? Are there plans to deploy Microsoft TV Foundation Edition commercially in other markets?

Hess: Working with Microsoft is part of our strategy to ensure that we continue to provide our customers with great value through advanced digital cable services. As with any new technology, we plan to deploy this technology on a rolling basis in Washington state to capture all possible customer and operational learnings. We have the ability to deploy in other markets, but I don’t have any specifics to share at this time.

PressPass: What can we expect to see from this partnership in the future?

Lichtman: This announcement is the result of many years of working together, but we don’t see this as the culmination of our relationship; in many ways we see it as the beginning. Moving forward I expect you’ll hear more from Microsoft and Comcast, as we believe Comcast is in a great position to take advantage of Microsoft software that lets them extend their presence throughout the home.

Hess: We see tremendous value in this relationship, and look forward to continuing to work with Microsoft to bring new services to our customers.

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