Microsoft Woos Cable With "Unbundled" WebTV and OpenCable Support
By Net4TV Voice (December 6, 1998)
Microsoft signaled an abrupt change in direction at the Western Cable Show in Anaheim this week as it offered its WebTV software, servers and service in a variety of "a la carte" configurations, and promised its support for the OpenCable initiative.
Scientific-Atlanta and Microsoft
In the Scientific-Atlanta booth, the WebTV browser runs on the SA Explorer 2000 advanced digital settop box.
The centerpiece of the new strategy was the announcement and demonstration of the WebTV browser and service on Scientific-Atlanta's Explorer 2000 advanced digital settop box. The two companies also announced a letter of intent that can provide cable operators with the WebTV Network service for customization and use with SA's settop box and digital interactive network.
Under the agreement, WebTV will integrate its service with Scientific-Atlanta's conditional access and head-end network systems. This will allow cable operators to offer WebTV service integrated with cable video programming delivered through Scientific-Atlanta systems. The two companies said that they also intend to collaborate on the design of a next-generation settop box that would run Windows CE and be based on WebTV.
New: Support for OpenCable
Microsoft also said that future settop WebTV designs would be compliant with OpenCable, a cable industry initiative that has the goal of creating a set of common, compatible, multi-vendor standards for cable boxes.
Previously, Microsoft had tried to establish its own competing standards and sell Microsoft and WebTV to the cable industry as a complete end-to-end solution. It had hoped to cut deals that would give it a share in the transaction revenue generated by the interactive systems, while offering to invest billions to subsidize the cable industry's investment in the new technologies.
But the cable operators just weren't buying. "No way we would have gone for that," said an executive of one large cable operator at the Western Show. "The bottom line was that we just didn't trust Microsoft, and we know that they've had designs on the cable industry for a long time. We just weren't about to do anything that would give them control of our customers, no matter how sexy their solution was or how much money they dangled. Support for OpenCable definitely is a better thing for us, and a better thing for them if they want to play in this industry."
Steve Perlman, president of WebTV, admitted to the Wall Street Journal that this was true. "The control issue created a lot of anxiety a year ago," he said. "We walked in saying "Here's a cool way to do it.' But there was a lot of push-back saying, 'We don't want to give you so much control.'"
WebTV A La Carte
"Your software partner for interactive services" is the new pitch to the cable industry.
At the Western Show, Microsoft's new offering included letting cable operators offer a "co-branded" WebTV service, or even building their own private network based on WebTV technology to create a "WebTV-like" experience entirely within a cable service. Although Microsoft hopes to sign up cable operators to annual support contracts, it no longer is asking for a share of the fees.
"I would say we've become a bit more pragmatic," laughed a WebTV representative who works with the cable industry. He admitted that there weren't any deals closed yet, "at least not solid enough to say anything about, but we're definitely getting a better reception."
Microsoft is offering its WebTV TV software platform based the Windows CE settop box, and a server system using Windows NT Server and the Microsoft Commerce Internet System (MCIS). The network services offered by Microsoft include the WebTV functionality, and also include MSN portal services and MSN content.
Programming, Tools and Technology
The Weather Channel shows WebTV-enhanced programming.
Microsoft announced that a number of content providers, including E! Entertainment Television, The Weather Channel, Children's Television Workshop and USA Networks were creating enhanced television content for the WebTV platform. It also recommended a number of toolmakers who were working on systems for enhancing content, and announced that it was working with StreamGate to create a Video On Demand server based on Microsoft NetShow technology.
None of these deals should be considered exclusive; at the same time the Scientific-Atlanta deal was being announced, WebTV was also being demonstrated in the booth of General Intruments, Scientific-Atlanta's biggest competitor, while NCI's settop box was being demonstrated at the station next to WebTV. The bottom line is that the cable companies will decide, and Microsoft's new approach makes it much more likely that they will get a piece.
