Finally, the long-awaited Microsoft TV platform is seeing the light of day. After a series of delays that let competitors take the upper hand in the battle to provide software for set-top boxes, Microsoft is rolling out its system this month to a select group of consumers.
In a flurry of deployments designed to show the potential of the platform, Microsoft TV will be used to deliver interactive television to analogue TV sets in France, digital cable subscribers in Portugal and satellite TV subscribers in the US.
"We are providing the broadest offering with the most flexibility for our network operators," says Ed Graczyk, Microsoft TV's director of marketing. "Each of these services represent something unique to the operator."
The first substantial deployment of the Microsoft TV platform will come at the end of December when America's biggest satellite television operator, DirecTV, will offer Microsoft's long-awaited "Ultimate TV" service to a select group of subscribers.
Ultimate TV is the next generation of WebTV, which Microsoft bought in 1997. The service was planned for a pre-Christmas rollout, but delays have pushed the date when it will be available to most consumers into early next year.
In the meantime, Microsoft is making a play in Europe for digital cable customers as well as the estimated 80 per cent of European TV viewers who don't subscribe to cable.
In Portugal, Microsoft TV is testing an interactive television service with the country's largest cable operator, TV Cabo. The service, which initially will be offered to 1,000 digital cable subscribers, includes e-mail, a program guide, banking, shopping and Internet access. TV Cabo, which has 880,000 analog and 106,000 digital subscribers, expects to sign up 300,000 users for its interactive service during the next three years.
In France, Microsoft is making a play for consumers who don't subscribe to cable by shipping the Microsoft TV operating system pre-installed on analog televisions. The interactivity comes via a phone line plugged in to the back of the set.
Built by French electronics giant Thomson Multimedia, the televisions come with a modem and keyboard.
"It's a digital product that works in an analogue environment," says Marc Meyer, a spokesman for Thomson. "We believe the Internet is just another channel that people will want to access."
Microsoft TV's new ventures come months after Europe's largest cable company, UPC, decided to test interactive TV services with a Microsoft rival, Liberate Technologies. Microsoft owns an 8 percent stake in UPC, but the Dutch cable giant contracted with Liberate when it appeared as if Microsoft would be unable to deliver in time for the roll out of digital services in Amsterdam in September.
Even with Microsoft's aggressive moves in Europe, senior VP Jon De Vaan said it could take some time for Microsoft TV to catch up to its rivals.
Datamonitor predicts that 34.4 million homes in the US and 33 million in Europe will have interactive television by 2003.