Cable While Awaiting DBS Launch
interactive TV middeleware reports US cable deals with
HITS & TVN; still expecting promised ExhoStar Dish
TV competition between cable and satellite services in
the United States finally is heating up with two recent
cable deals by OpenTV, which also has a growing satellite
Open TV announced
January 17 an agreement to provide interactive content
for AT&T HITS, the "Headend In The Sky" programming
feed accepted by 275 medium to small cable operators
across the country.
At the Western Show
in November, OpenTV unveiled an agreement to provide
interactive content to TVN, the digital content
distribution and management company serving more than 600
North American cable systems.
is deployed on 20 million digital set-top boxes worldwide
for digital cable, satellite and terrestrial services in
more than than 50 countries. The HITS and TVN deals give
OpenTV potential access to more than 60 million cable
households, which is potentially more than its primary
interactive TV rivals Liberate and PowerTV combined.
Yet don't jump to
any conclusions. Please pause to appreciate the
complexity below the surface.
HITS is a 100
percent Motorola platform. The DigiCypher compression
gear feeds the satellite dish farm here in Colorado for
the uplink to a bird overhead beaming conus (continental
U.S.) signals back down to local systems with Motorola
headends feeding the Motorola set-top boxes distributed
in customers' homes.
The OpenTV content
to be carried by HITS customers using the Motorola DCT
2000 boxes, will include digital content from OpenTV's
Static 2358, which will share the datastream with the
preponderance of analogue video channels. The HITS signal
will be carrying interactive content for Liberate
middleware, too, which also is implemented for the
In a deal declared
at last August, HITS will pay Liberate for every local
HITS affiliate that signs up. The first signatory was
named at the Western Show in December &endash; Tele-Media
Corp. of Delaware with 250,000 subscribers.
Liberate plans to distributed content from the HITS
headend for flash download into resilient memory at local
cable headends, which (in theory) will cut latency
problems from the satellite bounce in communications
between the local headend and the DCT 2000 boxes. A
crucial test case, the Tele-Media launch is expected by
the end of 2002.
urgently trying to support as many interactivity as the
DCT 2000 can tolerate, as if the manufacturer has a
choice. The advanced DCT 5000 boxes lwere dealt a heavy
blow last year when AT&T dropped its order for
Motorola's most "advanced" box, this after Microsoft TV
and Liberate showed they could not coexist on the
The DCT 5000 effort
began back when the cable division of Motorola was still
the independent cable pioneer equipment maker General
Instrument, and its primary customer, now AT&T
Broadband, was cable giant TCI, Tele-Communications Inc,
then run by John Malone, today making his mark earning
Marks or Euros in Germany with TCI spinoff Liberty Media.
across the States generally are independent cable
operators in smaller markets not controlled by one of the
major multi-system operators (MSOs), such as top-ranked
AT&T, or second-ranked AOL Time Warner, or
third-ranked Comcast. Local cable systems now owned by
Denver-based AT&T Broadband, however, soon will be
operated by Philadelphia-based Comcast, assuming the deal
for "AT&T Comcast" passes federal muster. Comcast
mostly is a Motorola plant, so portage of OpenTV to the
DCT series is inevitable, regardless of when an advanced
Now look at the
other OpenTV cable deal with TVN, a content provider that
is agnostic to platform. Its customers include AOL Time
Warner, which exclusively uses Scientific-Atlanta gear,
from the headend to the box, and all S-A boxes
exclusively uses the middleware and content provided by
subsidiary PowerTV. Some TVN customers are opting for
Liberate, and the sales forces for Microsoft TV and
Canal+ are not idle.
So, iTV middleware
and content vendors will continue selling proprietary
products until box makers start shipping the next
generation of advanced cable boxes in the U.S. based on
Europe's MHP content standard, which could be from two to
four years away.
So, when hearing
about blockbuster deals for OpenTV, do not be fooled into
thinking the American interactive market will belong to
American iTV game is far from over.
Yet Open TV and and
it's wholly owned subsidiary, Static 2358, which owns and
operates the PlayJam entertainment and games channel,
have an important edge in America.
OpenTV and Static
have contracts to provide content for the Dish Network,
owned by EchoStar, which is now acquiring the top-ranked
American digital broadcast satellite (DBS) service,
DirectTV, being sold by Hughes Electronics, which is part
of the aerospace wing of General Motors, which like
AT&T wants to focus on its core businesses.
weather-on-demand application is now running on the Dish
Network. The Denver-based direct-to-home broadcaster had
planned to launch UK-like OpenTV services by the 2001
holiday shopping season, but EchoStar pushed back a full
OpenTV launch because of the protracted fight with
NewsCorp for ownership of DirecTV. The sluggish economy
in the wake of the "9-11" terrorists attacks further has
delayed the launch. Thus far, EchoStar is not discreetly
saying when full-bore OpenTV and PlayJam services will
commence, but the 2002 holidays are not far off.
Although cable has
better than 60 percent penetration into the 100 million
households in the States compared to roughly 15 percent
for DBS, cable digital penetration is not much better.
Satellite and cable now are running neck and neck in
terms of daily sign-ups. The battle for digital supremacy
pivots on the human factors of the customer service and
the compelling dynamism of the interactive content.
This is where
Static 2358's software and programming services may
matter. PlayJam already is deployed on the leading edge
digital cable system in Half Moon Bay, Calif., which was
own by USA Media Cable but now is owned by AT&T
Comcast. Another Static product slated for HITS is Yo-Yo,
a voice-activated interactive dating application, which
has the potential to be a "killer app" driving iTV
acceptance among singles.
Open TV acquired
UK-based Static last July. The PlayJam games and
entertainment channel now reaches 11 million households
on Open, NTL and Telewest in the UK along with TPS and
Canal+ in France. The U.S. deals with TVN and HITS
significantly expands to channel's possible
A glimpse of what's
ahead comes from Joan Gillman, president of Static 2358.
She previously was the business development director for
British Interactive Broadcasting (BIB), the joint venture
with OpenTV and with NewsCorp that launched the "Open..."
interactive service on Sky digital in the UK. When
majority stakeholder BSkyB took control of BIB, she
guided BSkyB in the relationships developed with such
ventures as UpMyStreet, Edison Interactive and
Physicians' Online. Gillman entered the media trade after
a decade in top staff position for Republican Senator
Chris Dodd. She came to run Static through her connection
with company founder Jasper Smith and from knowing the
new president of OpenTV, James Ackerman, another BIB
As for what
direction Static with take its Euro-tested content in the
States, she says she's "encouraged by the response to our
services in Half Moon Bay." The offerings there include
the Oasis portal, news and weather on demand in
partnership with Sky News, and T-commerce
Also featured at
Half Moon Bay is an "enhanced TV" channel built around
the "Walking With Dinosaurs" programming from Discovery
Networks (backed by AT&T and others), with enhanced
text and graphics wrapped around the video. The enhanced
content is created with Static's proprietary software.
Static does not use the html-based ATVEF or MHP
protocols, which have been mandated by CableLabs in
Colorado for all advanced OpenCable boxes once they start
shipping in 2004 or later.
Reluctant to pin
down finite plans or timing for HITS deployments, Gillman
says, "We have an agreement with HITS, and now it's up to
HIT's affiliate customers to drive this forward.
"Right now we're
working with some HITS operators to design 'Stage One'
packages that focus on cultivating the subscribers,
helping people feel comfortable with being interactive.
We're introducing content that leverages the existing
technology [DCT 2000 boxes] to build markets,
taking advantage of the return path where available, such
as eWallet for commerce. We expect several 'Stage One'
announcements over the course of the year. 'Stage Two'
will be driven by when the operators are ready, and I
don't know when that will be."
As for whether
Static and OpenTV will push for "gaming" or gambling
applications in the States, as available in the UK
despite controversy over its social impact, she replies,
"We're doing due diligence on gaming." .