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Alan Breznick
Despite rumors of impending major carriage agreements, Microsoft Corp.'s WebTV Networks walked away from Chicago last week with no new cable distribution deals but increased support for its interactive and Internet TV technology software.
Meanwhile, WorldGate Communications Inc., WebTV's small but leading rival, inked its first system carriage deal with Comcast Corp. It also announced another system rollout by Charter Communications and named a new senior executive.
As the National Show began, press reports suggested that WebTV might be close to completing breakthrough distribution agreements with Comcast, Charter and Rogers Cablesystems. A Comcast deal seemed particularly likely because of Microsoft's $1 billion investment in the MSO.
But executives of WebTV, which has so far struck a carriage deal only with AT&T Broadband & Internet Services, denied the reports last week. While a number of MSOs have expressed strong interest in the service, they said no agreements are imminent because it would require big new orders of digital cable set-top boxes.
"We certainly meet with these guys all the time," said Alan Yates, director of platform marketing for Microsoft WebTV. But, he added, "I don't expect anything this week."
In fact, no new cable distribution agreements may come for a while. Yates said he doesn't expect the Internet TV market to take off until EchoStar Communications Corp. launches WebTV in DBS homes later this summer and AT&T launches it in two showcase markets - Denver and Cedar Rapids, Iowa - early next year.
Instead, WebTV officials mostly spent the show drumming up cable industry support for Microsoft's interactive TV client and server software, known as TVPAK (for TV Platform Adaptation Kit). They announced that more than 30 cable operators, hardware manufacturers, system integrators, infrastructure suppliers and programmers are now working with the software, including Home Box Office, Discovery Communications Inc., Home & Garden Television, MSNBC and the Weather Channel.
In addition, Philips Electronics said it will incorporate the TVPAK software in its new line of digital cable set-tops. Philips intends to launch Internet TV and other services based on the software by the middle of next year.
WorldGate, which has about 5,000 subscribers to WebTV's more than 800,000 customers, unveiled an agreement with Comcast to launch on the MSO's 50,000-subscriber system in Willow Grove, Pa., outside Philadelphia.
The commercial deployment, slated for this fall, follows a Comcast market trial of WorldGate on a nearby system in the Philadelphia suburbs.
Comcast plans to offer WorldGate's Internet TV service as part of its rollout of new digital boxes from General Instrument Corp. With the deal, WorldGate now has trial or commercial deployments with about 25 cable systems in the U.S., Bahamas, South America, Europe and Asia.
Under the new agreement with Charter, WorldGate will launch on the MSO's Lanett, Ala., system later this summer. Charter, which has been testing WorldGate in Lanett since last month. It will use a software download to offer the service over advanced analog set-tops from Scientific-Atlanta Inc.
WorldGate also announced last week that Gerard Kunkel, who joined the company two years ago as VP-strategic programs, has been promoted to SVP-sales, marketing and product development for the company's worldwide operations.
In other Internet TV developments last week:
Excite and PowerTV announced a licensing and services agreement to place Excite's new Local.TV software in new digital set-top boxes from Scientific-Atlanta.
Israel's Peach Networks Ltd. signed a separate deal with S-A to place its Internet TV software in the set-top manufacturer's new Explorer 2000 boxes. Peach also inked an agreement with Israel's Matav Cable Media Systems to conduct a market trial of its service.
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