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Analysis: Interactive TV brings new tricks to an old box

PC World

(IDG) -- Interactive TV. Enhanced TV. ITV. Whatever you call it, it's the couch potato's dream: a boob tube that allows you to e-mail mom, order pizza, and watch any episode of "The Beverly Hillbillies" whenever you want.

Finally, after years of hype and promises, this show is hitting prime time. From big-leaguers Microsoft and America Online to your local pay television provider and upstarts TiVo and Replay, a range of companies are scrambling to compete for the right to let you save a season's worth of "The West Wing" while e-mailing your pals about an eBay auction.

Details and emphasis vary by service. AOLTV, for example, throws in its famed instant messaging and other features of its online service. TiVo and Replay will leverage their existing digital video recorder (DVR) services to enable you to watch what you want, whenever you want. In some areas you'll have unprecedented video-on-demand service. Whatever their focus, these services won't be cheap: Most require you to pay $300 or more for a set-top box, plus monthly service fees on top of your current pay TV costs.

Your choices will depend mostly on the type of pay TV service you have or can get: Microsoft's UltimateTV, for example, will work with digital services. At its launch this holiday season, it will be available only with DirecTV satellite service. Many other services limit you to Internet access via an old-fashioned 56 KBps modem and phone line, which might be a problem in some living rooms. You also need a fairly large TV screen to handle the picture-in-picture displays of features such as content-related Web sites and pop-up menus.

Still, serious channel surfers who would like to harness the power of digital technology to render their hours of self-imposed sofa sitting more fun and informative will love interactive TV.

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The Microsoft show

Among the various interactive TV initiatives, perhaps the most ambitious is Microsoft's UltimateTV, which marries a full-featured DVR to WebTV-like Internet capabilities.

Expected to launch by year-end, UltimateTV requires a $399 set-top box that you'll buy retail. Thomson/RCA and Sony are the initial vendors; Sony's box comes with a keyboard (you'll have to buy the dish separately), and a DirecTV dish accompanies RCA's (keyboard sold separately). You'll also have to pay a monthly service fee of $10 or $15 on top of a DirecTV programming package (which starts at about $30 a month).

Digital video recorder features look particularly impressive: You can record up to 35 hours of programming, which you ferret out either by browsing or by searching the electronic program guide. When you are ready to watch a recorded show, you simply click the My Shows option in a menu that appears when you turn your set on. UltimateTV works only with digital services (AT&T is committed to supplying 7.5 million UltimateTV licenses to digital cable subscribers starting this year); as a result, Microsoft says, recordings are superior in quality to those made from analog TV services. You can also record one show while watching another -- something not all DVRs permit you to do.

The $10 monthly UltimateTV service includes three hours of WebTV-style Internet access via a built-in 56 KBps modem. That's enough to let you dash off an occasional e-mail or surf to a program-related Web site during commercial breaks. If you already have an Internet service provider, you can pay Microsoft an additional $5 per month in exchange for unlimited use of the account with UltimateTV. Microsoft says that it imposes the charge because you will be accessing its servers for some content.

'AOL Anywhere' includes your TV set

Internet colossus AOL entered the fray last fall in several cities with AOLTV, which lets AOL users chat, send instant messages, and look at e-mail while watching television. AOLTV eventually plans to introduce TV-themed Web content and chat rooms, and a program guide that groups TV channels under headings such as Movies, News, and Sports.

To use AOLTV, consumers must purchase a $250 box and pay a monthly service fee ($15 for America Online members, $25 for nonmembers). One of AOLTV's most powerful selling points is that it works with any cable service. At launch, however, AOLTV's box has no digital video recorder, so the video looks more like a WebTV rerun. AOLTV intends to offer a box that includes TiVo digital recording capability early next year, and it's working on a DirecTV box. A merged AOL and Time Warner would gradually upgrade Time Warner Cable set-top boxes with a version of AOLTV, thereby eliminating the need to obtain a special AOLTV box. Time Warner is the parent company of

Hard drive to the TV top

Starting this January, DirecTV competitor EchoStar will introduce an UltimateTV competitor -- a new line of digital video recorders based on the OpenTV operating system. EchoStar's new box will not offer e-mail or Web browsing. Instead, it will rely on a proprietary interactive service called Wink, which requires a modem hookup.

AOL TV screenshot
AOL TV surrounds a small TV picture with customized chat rooms and TV-themed Web content  

DVR pioneer TiVo has partnered with DirecTV to build a box that records as many as 35 hours of satellite programming. A new Wish List option allows you to search through two weeks of upcoming television show listings by program genre, by actor, or by director.

Meanwhile, TiVo archrival ReplayTV is adding a My ReplayTV feature that will let customers program their DVR via any Web-enabled device. Users will enter their requests on a Web page, and their modem-equipped ReplayTV box will retrieve the desired shows by dialing up the Net several times a day.

ReplayTV has a deal with Charter Communications to roll out set-top boxes with ReplayTV DVR features later this year. Replay's free basic service, however, recently started serving up banner ads.

Digital TV rises

Although digital television (which promises broadcast quality superior to that of old-fashioned analog cable) is most widely available by satellite, the tiny percentage of U.S. households that can obtain interactive digital cable services will enjoy the greatest convenience. Not only does digital cable dispense with the messy business of installing a satellite dish and cables -- a process that's particularly unwieldy for apartment dwellers -- it also permits such features as video on demand, e-mail, and Web browsing, without the added hassle of a phone-line hookup.

Insight Communications customers can already spend $7 more a month for access to 400 video-on-demand movies, 40 digital music channels, an interactive program guide, and interactive community information and entertainment guides. The $7 doesn't yield free movies: You have to pay an additional $4 for a recent title, $1 for an older film. The films are streamed from Insight's servers, but viewers can stop, start, pause, and rewind them just as if they resided on a local drive.

Charter Communications, meanwhile, is one of several cable companies that offer limited interactivity (but not Internet access) via the Wink service.

Moving beyond channel surfing

There's more to interactive TV than digital video recorders, e-mail, and plain-vanilla Web browsing. Increasingly, you'll be able to access program-related content, hang out in chat rooms, look up facts and figures, and play games. But content will vary depending on the interactive service you get.

NBC, for example, has teamed with Microsoft's WebTV Networks to add interactive stock tickers and hyperlinks to shows on its CNBC and MSNBC cable channels. WebTV (and soon, UltimateTV) customers who watch NBC's "Friday Night," a rock-video show, can vote for their favorite videos, link to artist biographies, and join t-clubs (t stands for television) that hold live chats during the program. Not to be left behind, CBS plans to add 500 hours of interactive content to its network this winter.

Cable channels such as the Game Show Network let viewers become contestants during shows like "The Price Is Right," "Family Feud," and "Wheel of Fortune." From your living room, for example, you can guess the phrase on "Wheel of Fortune" before Vanna flips the letters. You may not win a Jet Ski, but you can take quiet pride in beating other online players to the draw.

Is your TV incompatible?

AOLTV reduces the TV picture to roughly one-fifth its original size, puts it in the upper-right corner of the TV screen, and surrounds the picture with chat rooms and TV-themed Web content. AOL is already working with merger partner Time Warner to embed video triggers that invite you to take a trivia quiz, participate in a live poll, or buy the dress Jennifer Aniston is wearing on "Friends."

Unfortunately, WebTV and UltimateTV subscribers won't be able to access AOL's content, or vice versa. That's because the content formats differ -- a situation that shows no sign of changing despite calls for an open standard. But AOL and WebTV aren't the only content games in town. Wink, a service that several cable systems offer, superimposes a stylized letter i on your TV screen to identify programs with related content. Push a corresponding button on your remote, and you'll see overlays of text and graphics you can click on to request information or order merchandise. For example, if you heard a band you liked on "The Tonight Show," you could click on the remote to send a purchase order for the group's CD over a modem hookup.

Interactive content isn't yet king. But within the next few years, it promises to make TV more entertaining and educational--in short, less of an idiot box.

What's the big picture for the small screen?

Interactive TV differs from earlier concepts that envisioned merging PCs and TVs, as well as from more-recent Internet appliances designed to compete for space on your kitchen counter or night table. Interactive TV services are unequivocally TV-centric; they use Internet and digital technology only to enhance the entertainment that you expect to see when you plop yourself down in front of the tube.

Which of these choices is for you? If you're interested only in searching for programs and recording them for later viewing, consider buying a Replay or TiVo box and signing up for the company's basic services. If you're also interested in adding Internet services and you can get DirecTV, you'll want to investigate UltimateTV. AOL addicts might find AOLTV appealing. Even if you don't seek out these services, you can count on hearing from your existing cable or satellite service about its interactive offerings soon. Passive TV is going the way of rabbit ears.

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