Microsoft aggressive as lines between Internet, TV blur
Its moves worry competitors
July 29, 1997
Web posted at: 6:35 p.m. EDT (2235 GMT)
By Michael A. Hiltzik and Leslie Helm
The melding of the Internet and television is on the horizon,
and Microsoft seems intent on taking control, a prospect that
makes many wary and some doubtful.
Beginning with the new season, episodes of "Moesha" on UPN
will carry more than just a story line.
Viewers with the proper equipment can watch the program in
one corner of their screen, with the rest devoted to such
interactive features -- "enhancements" in Microsoft parlance
-- as windows for writing electronic fan mail, bringing up
pictures and biographies of the stars and even buying
knockoffs of the characters' costumes.
The catch, which makes the supercharged "Moesha" more than
just another TV industry story, is that the enhancements will
be accessible only to customers in good standing with
Their computers will have to be running Windows 98, the
company's new operating system due on retail shelves next
year, and will also need special TV-receiver circuitry
designed and installed to Microsoft specifications. Consumers
without any one of these pieces of the jigsaw will think
they're just watching an ordinary episode.
Microsoft not only is promoting these enhancements, it paid
for them too, hiring and assigning its own production team to
work with the series' producers at a cost of $25,000 to
$50,000 per episode. It's this tight embrace by one of the
world's most ruthlessly competitive companies that has many
in the television and telecommunications industries wary.
Whose standards will prevail?
Having already obliterated its major competitors in PC
operating system software with Windows and largely
obliterated rivals in such PC applications as word processing
and spreadsheets, Microsoft, they fear, may now be preparing
to ensnare the TV world.
"Very rapidly the (broadcast) industry is being forced to
accept Microsoft as not a software company but as a company
creating standards which it will control," says Philip J.
Monego, chief executive of NetChannel, a South San Francisco
provider of TV-based Internet services that aims to compete
NetChannel is mounting a public campaign against the software
giant. "This is very clever and very well thought out, but it
has very sinister ambitions about it," Monego said.
For their part, Microsoft executives say they are simply
demonstrating for TV and cable companies the range of tools
available to help make digital TV, the high-capacity,
high-quality medium that will gradually replace
traditional analog TV broadcasts over the next decade, a
'There's a lot of jockeying'
"There's a lot of jockeying by a lot of companies" to develop
features and content for digital communications, Microsoft
Chairman Bill Gates said in a recent speech to securities
"Through collaboration with industries like cable and
television, we'll figure it out. We need something in place
to bootstrap it so there is a reason to transmit" digital TV.
That "something," he argues, should be Windows. For personal
computers, it will be Windows 98. And for the majority of
U.S. households that still don't have a PC but do have a
television set, it will be Windows CE.
Windows CE is a stripped-down operating system
that can deliver through a box that sits on top of a TV set,
not only cable and satellite connections but links to the
Internet and some conventional computer applications (and,
Gates reportedly hinted to cable executives, a small royalty
to Microsoft for every transaction executed through the
There are other signs that Microsoft intends to become more
than a "collaborator" in the so-called broad-band melding of
TV, telecommunications and computer networks.
Microsoft moves into strategic position
The company has moved with startling speed to seize a
strategic position on this multibillion-dollar battlefield.
Since January it has offered $425 million to buy WebTV, which
provides Internet access to owners of conventional TV sets,
and bought 11.5 percent of the cable operator Comcast for $1
billion. The WebTV deal is under federal antitrust review.
Microsoft has produced and demonstrated to executives all
over Hollywood its "enhanced" prime-time programming, which
includes not only "Moesha" but the WB network hour-long
thriller "F/X" and the Sunday-night USA Network feature
"Pacific Blue," a drama about California beach cops.
In addition to trying to persuade cable operators to accept
its Windows CE set-top boxes, Microsoft has joined with Intel
Corp. and Compaq Computer Corp. to get TV broadcasters to
adopt a digital TV transmission format, known as "progressive
scan," that works particularly well with PCs. The TV industry
prefers a different standard known as interlace.
'I don't think Microsoft has a lock on this'
Microsoft faces major hurdles in securing domination of
digital TV. Some observers believe the field is too young and
diverse to be so easily conquered.
"I don't think Microsoft has a lock on this in the future,"
says James Murdoch, vice president for music and new media at
News Corp., owner of Fox Broadcasting Co. and 20th Century
Fox Studios. "A lot of operating systems are coming up where
the playing field is level."
Some forecasters contend that PCs and TVs are likely to
become similar in appearance and function, perhaps even a
single hybrid appliance, as digital technology spreads from
computer networks to video and cable broadcasting and
telephone transmission. Already, a special Intel-produced PC
card makes it possible to receive TV signals and related Web
pages together on a PC screen.
"TV is really not competition" for computers," argues Sriram
Viswanathan, a Beverly Hills-based representative of chip
maker Intel's content group. "TV is an application of the
appliance." That would play to Microsoft's strength.
The options are seemingly limitless
But it is still unclear whether the PC and TV audiences, one
devoted to active, solitary interactions with their machines
and the other to passive communal viewing, will merge quite
as seamlessly as the hardware itself.
"I sit in front of a Windows computer all day," Murdoch says.
"I don't think I want to sit on my couch and see the same
A look at the demonstration versions of "Moesha" and several
other Microsoft-enhanced programs gives a taste of the
potential and the pitfalls of the new systems. The show
itself is relegated to a TV-shaped rectangle, about one-third
the size of the screen, in the upper right corner.
Along the left and bottom of the screen is an L-shaped space
to accommodate the interactive features. In the case of
"Moesha," these include blank windows in which viewers can
type and read chat-room communications or send e-mail to
series star Brandy Norwood and her fellow cast members.
Theoretically, at least, the possible functions in the L are
endless. Viewers can also choose to do nothing, even
expanding the TV space to fill the entire screen. An enhanced
version of the New Orleans cooking show "The Essence of
Emeril" offers written recipes, explanations of the chef's
techniques, and order forms for his branded line of
condiments and spices.
Microsoft executives and consultants say sports programs can
offer scores, statistics, rosters and replays; broadcasts of
soap operas, continuing series and movies can fill in
latecomers with the stories.
Appeal not universal
Yet even they agree that acceptance of the hyperactive hybrid
screens will not be universal. Microsoft executives say the
divide tends to be generational, with younger producers or
those targeting a younger audience more receptive to
"We've worked with producers who immediately rattle off 15
things they want to do," says Paul Mitchell, manager of the
enhanced-TV unit at Microsoft. "Others say they make films
and aren't interested."
That suggests that some of the divide may be generic, with
producers of serious dramas or comedies preferring to keep
their viewers' eyes focused on the action.
"There will be a certain segment where this will have
applications," says one broadcast executive who has viewed
the Microsoft demonstrations. "But if you can't watch the
program, are you talking about nothing but clutter?"
Just as critical as the creative issues are the commercial
ones. Broadcast executives are no happier than writers and
producers about encouraging viewers' attention to wander or
ceding a portion of the screen to interlopers. Among other
things, it could diminish the viewers' value to advertisers.
"If someone sits down to watch, we've got them for half an
hour or an hour," says News Corp.'s Murdoch. "If we can
enhance that experience, it's very valuable to us. But I
don't know how necessary it is to have Microsoft do it for
Microsoft: Viewer holds the power
Microsoft representatives say these concerns are misplaced,
that they're offering technology that creative minds can use
as they choose.
"It's a unique skill to get someone to park their rear end in
a seat for an hour," says Larry Namer, president of Comspan
Communications, a consultant to Microsoft on the enhancement
project. "Clearly, people don't necessarily find what's on TV
compelling all the time. This gives (creators) storytelling
tools that are totally optional for the viewer."
As for fears that viewers will wander or that broadcasters
would be foolish to give away part of the screen, Namer
argues that with digital technology giving viewers the
opportunity to voluntarily divide their attention between a
running TV segment and a simultaneously broadcast Web page,
the only question is whether TV producers will control the
material filling the L.
"If you, the producer of the TV show, do not provide the
default space, the viewer will find it for himself," he says.
"The days of your owning the screen are gone."
Copyright 1997 Los Angeles Times Syndicate
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