Microsoft
Pursues TV Strategy
As Cable Resistance Endures
Does Microsoft's
leadership fathom the depth of the cable industry
resistance to the company?
by Ken Freed,
"America Watch" columnist in
Euromedia.
Microsoft
Corporation did its best to make a big splash at the June
convention and show of the National Cable and
Telecommunications Association. Whether their efforts
will soak in remains uncertain. Does Microsoft's
leadership fathom the depth of cable industry resistance
to the company?
In the Nineties,
Microsoft invested millions into developing a digital box
with General Instrument for TCI. The project continued
after the largest cable equipment manufacturer was
acquired by Motorola and the largest cable system
operator was acquired by AT&T. When these top two
ventures finally walked away from the deal, courteously,
of course, Microsoft had to go back to the drawing table
and rethink its approach.
The chief technical
issue seemed to be that Microsoft's programming was too
thick, demanding too much memory and computing capacity
in the box, leaving little room for anything else. This
complaint was compounded by incompatibility with software
by other vendors, so cable operators lacked real choice
in box operating systems if they used the Microsoft TV.
Industry pundits at
the time, including myself, suggested that cable TV
players had been happy to accept the generous Microsoft
dowry and get in bed with the company, but they would
always remain reticent to consummate any true marriage
that granted Microsoft a lasting legacy within the
digital box. At root was (and is) a primal fear that
Microsoft could dominate the television industry like it
dominates the computer industry.
Given this history,
Microsoft's expansive presence at the 2003 NCTA seemed to
say the company had learned its lessons and was ready to
try again with a new spirit of friendly
cooperation.
The computing
monopoly constructed one of the largest and most
expensive stands at the annual NCTA gathering. Moshe
Lichtman, vice president of the Microsoft TV division,
spoke prominently on the promising role of digital TV
software in the emerging video-on-demand
market.
The smiling and
eager Microsoft booth staff touted the brand new
"Microsoft TV Foundation Edition", a revised software
platform for thin-client digital TV set-top boxes,
intended as a foundation for all applications.
Microsoft conveyed
the impression that everyone was jumping on its
bandwagon. Deals were declared with multiple system
operators (MSOs) and with leading cable hardware and
software vendors along with some content providers,
Microsoft promised support from these players for future
MSTV products.
Microsoft announced
that Comcast, the new number one U.S. MSO since it
acquired AT&T's cable and broadband assets, had
agreed to give the thinner MSTV system a trial, as would
a Mexico-based cable operator using the popular name of
Cablevision. By all indications, Microsoft would foot
most of the bill for these limited trials. Microsoft
asserted that the two MSOs would "potentially deploy" the
Foundation Edition on their commercial systems.
Microsoft further
announced that Motorola will integrate the new platform
onto the DCT1700 and DCT2000 set-tops. SeaChange,
Concurrent, MetaTV, Two Way TV, and Advanced Digital
Broadcast (ADB) are working with Microsoft to "extend the
capabilities of the Microsoft TV Foundation platform" for
video on demand (VOD) and related interactive services.
Sigma Designs and National Semiconductor are working with
a few application developers on "pending
technologies".
In other words, all
of these cable ventures had agreed to accept Microsoft
development funding.
"Microsoft is
working with some of the best industry partners to bring
cable operators solutions that will help us take
television to a new level for consumers both now and down
the road," Lichtman told a press conference. "Together,
we are working to help the industry get more value from
its investments in digital cable and on-demand. When
working with Microsoft, MSOs can take advantage of some
of the best that the industry has to offer without
sacrificing flexibility, thereby enabling greater agility
and increased revenues per user."
All this may sound
good, but the old worries have not gone away. Cable still
resists the Microsoft model of standards setting -- first
rule the market, then make the rules.
For proof the
leopard has not changed its spots, critics at NCTA
pointed to Microsoft using a surrogate, the SCO Group, to
fight a growing threat to the supremacy of Windows, the
open-source Linux operating system. SCO in March filed an
infringement lawsuit against IBM and now threatens to sue
anyone using the Unix-based system without paying a
prohibitive licensing fee to SCO.
Aware of how
Microsoft acts in the PC world, cable is wary of how the
company will act in the TV world if allowed to gain a
firm foothold.
Are these concerns
justified? What do you think? 
.
