Digital, Interactive and Web TV

Players

Hardware & Software Suppliers

[Hardware] [Software] [Retailers]
Note: there is much overlap in these areas.

Hardware

ONdigital has appointed a number of manufacturers including Grundig, Pace Microtechnology, Philips, Nokia, Sony and Toshiba to make their set-top boxes. These boxes will be running the MediaHighway interactive software from CANAL+.

Pace

In February 1999 Telewest also placed an order with Pace Microtechnology for 100,000 decoders. This meant all the 3 (now 2) UK cable operators will use software from NCI, a consortium of Netscape, Oracle and other IT suppliers. Pace also supplies BSkyB (but it uses its own proprietory software) as well as Time Warner in the US. In the US there is a potential replacement market of 70m analogue set-top boxes.

Much of the UK demand in 2000 was for set-top boxes capable of handling video-on-demand. Long term Pace sees the set-top boxes (STB) being the hub of a home network with connections to home appliances. In fact it thinks it more likely the STB will be hidden under the stairs. There was talk of shipping STBs called Home Gateway with hard disks and wireless connections by the end of 2000 but this never materialised and is probably some years off. In the meantime Pace has some urgent challenges meeting the needs of these existing customers. In July 2000 Telewest had to revert to installing analogue set-top boxes as Pace was unable to supply the digital ones. This was due to a shortage of flash memory chips. In early 2001 Telewest second sourced from Scientific Altlanta.

Its turnover to 31 May 2000 was £378m and pre-tax profits £24m. In the next 6 months it increased to £205m t/o and £17.9m profit for the period. Engineering staff are being increased but production is being shifted to the Far East.

Alba

The mass producer Alba, with its Bush and Goodman brands, surprised everyone by announcing in April 1999 a £500 TV set with in-built decoder, though subscribers will have to sign-up to ONdigital for 12 months. In March 1999, Alba and Pace announced they would make a TV set with Internet access and sell it under the Bush brand name, a well known brand of the 1950s and 1960s. It would cost under £200 with additional revenues obtained from the telephone companies and from an e-commerce portal provided by Virgin Net. Analysts dubbed it the "internet for grannies". A stand-alone set top box would also be available.

However, 2 years later in June 2001, the company said that losses of almost £18m on the internet products had wiped out its profits for the year. The company said that 115,000 people had subscribed to the service. Apparently the sets were subsidised in the expectation of the shortfall being made up with revenue when using the service. Presumably customers used the service less than expected.

Sony

In the UK Sony has launched a range of integrated digital TVs. They offer 66cm or 76cm screens, Dolby Pro Logic Surround sound or Nicam sound, plus there is a 103cm rear projection set. They are sold in High Street outlets such as Currys.

In the UK in early 1998 Microsoft teamed up with BT and the BBC to trial the WebTV system. An icon in the corner of the TV screen indicates that viewers can access the associated BBC web pages simply by clicking a button on their remote control. Access is via BT's Internet service. The units are made by Pace Micro Technology and Sony. The trial was planned to last 5 months.

In August 2000, BSkyB awarded the company an order for 200,000 set-top boxes. They will be assembled in Wales.

Nokia

Nokia is due to launch an advanced set-top box / digital recorder called the Media Terminal in November 2001 but needs to rethink the planned price of £500 to £600.

Thomson Multimedia

In Europe, in July 1998, Microsoft joined forces with DirecTV, Alcatel and NEC to between them acquire a 30% stake in Thomson Multimedia. The plan is to develop a new generation of interactive digital receivers and interactive services. Thomson will manufacture the UK version of the Tivo digital recorder.

Tivo

Tivo designs digital video recorded that records not onto tape but onto a hard disk. See Advanced Set Top Boxes. The company launched a video recorder in the UK in time for Christmas 2000, with BSkyB undertaking the marketing along with retailers Comet, Dixons, Currys and others. The device sells for £400 and initials sales were low. Access to the EPG and intelligent recording requires a £10 per month subscription and connection to a telephone line. In February 2001 the company was in talks with NTL to market the product to NTL's 2m cable customers. Later in July 2001 BSkyB annouced a more advanced box called Sky+ to retail at £300. It will be manufactured by Pace MicroTechnology.

Microsoft

Whilst Microsoft is predominately a software provider for WebTV (see below), in August 2000 it announced that it had designed a chip to handle simultaneous digital data streams. The company said it had developed the Solo2 chip as there was no commercial chip available that was sophisticated enough. The chip would be used in set-top boxes and video recorders.

Scientific Altlanta

In February 2001 the company became an additional supplier of set-top boxes to Telewest. It will supply its Explorer 400DVB unit.

XTC

This start-up company has designed a low cost set-top box that it says could be retailed for as little as £20 making it ideal for mass converting millions of analoge TVs to receive a digital signal.

Software

Microsoft

In 1997 the US Microsoft acquired a 11.5% stake in Comcast and in the same year it purchased WebTV Networks for $425m and has grown the subscriber base to 400,000. WebTV has a set top box that allows internet access from a television and Microsoft plans to change its operating system to Windows CE. Then in 1998 it spent £212m on a 10% stake in Road Runner a high speed internet provider, as a joint venture with Time Warner and MediaOne. Later in 1998, it made a $200m investment in Quest Communications, the US 4th long distance provider.

In 1999 the pace continued. As a result of an alliance with AT&T, that company will also install Microsoft's Windows CE in its set-top decoders. AT&T, with it's acquisitions of TCI and MediaOne, now reaches 16m US homes via cable. As part of the deal, Microsoft has agreed to purchase 29.9% of Telewest Communications, the UK's number 2 cable company. Microsoft had already this year made a $500m stake in the UK's other major cable operator, NTL and a $300m investment in United Pan-European Communications (UPC), Europe's biggest private cable company with operations in 10 countries.UPC intends to standardised on Microsoft's products. However. Microsoft was having problems delivering robust software and AT&T said it would switch to rival Liberate in pilot tests.

Microsoft has also partnered with two satellite operators EchoStar Communciations and DirecTV. For them it has developed its Ultimate set-top box that has been sold to 30,000 subscribers.

Microsoft has joined forces with Intel and Compaq to create DTV Group, a body with the aim of influencing content providers as to the benefits of delivering content to PCs as well as televisions. They argue that PC technology, whether in a PC or embedded within a television, provides the means for powerful and advanced interactivity.

Philips and Sony both use WebTV technology within their Web TV sets. Apparently Sony sold 35,000 in the first 2 months of the US launch. Philips also uses Microsoft's enhanced TV software technology in its set-top boxes. This would power the next generation of set-top boxes to provide advance interactivity and e-commerce.

Open TV

US OpenTV provides the software for 13 television networks including BSkyB. Additional backing of $31m in October 99 will fund e-commerce software and channels. In July 2001 it paid $59m to purchase Static, a company that developed the interactive games web site Playjam.

Oracle

Microsoft's rival Oracle is teaming up with various TV and media companies such as CBS, ABC, BBC, CNN and NBC. The purpose is to develop technologies for the fast delivery of information, including video, to large numbers of simultaneous users. It has also been developing a Web TV set.

Cabot

The UK company Cabot has developed various software tools that can generate interactive applications for multi-platforms.

Retailers

Note that retail sales only apply to the terrestrial service from ITV Digital and to WebTVs. Satellite (BSkyB) and cable (NTL and Telewest) services are sold directly by the operators.

Currys and Dixons are both selling ITV Digital receivers for £119 in a package that provides the set-top box, a WebTV modem box (by Nokia), internet access and the choice of 6 primary TV channels (as well as the free-to-air channels) for 12 months.

Currys is selling Sony integrated digital TVs from circa £980 depending on screen size.

The toy retailer Toys-R-Us was advertising both set-top boxes and web-TVs for email and internet surfing. Costs were £79 and £169 respectively with no monthly subscriptions. Manufacturer is not known.

Granada Rentals is initially offering 200,000 free set-top box and free internet access for the cost of a local telephone call. Subscribers pay a £20 deposit and no monthly subscription but must complete a monthly consumer survey.

BSkyB inconjunction with Comet, Currys and Dixons are to retail the Tivo personal video recorder.

External References

Note: This sub-section was originally part of the Player section, where many references are to be found.
Bulkley, Kate, 2001, There's scope for more thinking inside the box, The Independent, 11 July 2001.
Larsen, Peter Thal, 2000, Move fast, aim high, remain independent [Pace], Financial Times, 10 January 2000.
McIntosh, Bill, 2000, Telewest's digital plans hit by component shortages, The Independent, 22 July 2000.
McIntosh, Bill, 2000, BSkyB signs deal with Sony for set-top boxes, The Independent, 25 August 2000.
McIntosh, Bill, 2000, Microsoft and Philips seal software licence deal for TV set-top boxes, The Independent, 9 September 2000.
McIntosh, Bill, 2001, Video recorder maker Tivo in talks with NTL, The Independent, 2 February 2001.
McIntosh, Bill, 2001, BSkyB launches interactive set-top recording box to boost market presence, The Independent, 19 July 2001.
McIntosh, Bill, 2000, Internet TV losses wipe out Alba profits, The Independent, 20 June 2000.
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