June 9, 2003 12:30 PM PDT

Microsoft cables new TV technology

Microsoft Chairman Bill Gates, speaking at the opening session of the National Cable & Telecommunications Association's annual trade show, outlined his company's new software for bridging cable television and interactive digital technology.

Microsoft TV Foundation Edition, for use by cable operators with their existing hardware and network systems, is designed to offer cable TV viewers features like video on demand and advanced parental screening.

Gates gave his remarks at a show panel Monday morning, along with executives from several other cable and Internet companies including Viacom, AOL Time Warner and Comcast.

The panel, titled "Leading the Digital Revolution," was devoted to "the business opportunities and challenges in transition to digital television, as well as the relationship among the various marketplace segments that are bringing consumers benefits of the broadband digital platform deployed by the cable industry."

To what degree Microsoft is bringing benefits to cable consumers in any substantial numbers is a matter of debate in the cable industry.

Microsoft this year switched off its investment in the United Kingdom's Telewest Communications, selling its 23 percent stake for $5 million after a 2000 stock exchange valued then at $2.6 billion. That divestment joins others in revealing a general lack of growth in the cable industry.

To counter the impression that the industry is bypassing Microsoft in its march toward interactive digital capacity, the software giant on Monday released a list of companies that had pledged support for TV Foundation: Advanced Digital Broadcast, Concurrent Computer, MetaTV, Motorola, SeaChange and Two Way TV.

One analyst at the trade show said Microsoft's new offering marks a substantial--and positive--change from how the company had approached cable in the past. The new approach is crucial, she said, in gaining traction in a lukewarm market.

"This marks a fundamental shift in the way they've been looking at the market," Lydia Loizides, a senior analyst at Jupiter Research, said in a telephone interview. "In the U.S., they haven't had a lot of success...but now they appear very focused, very methodical, thinking in terms of how they can actually fix problems today." "Let's face it: iTV (interactive television) middleware has not been a place of massively robust growth," Loizidez continued. "But that's because the focus was on the nice-to-haves. And now it's on the need-to-haves."

 

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