Cable bringing PC, TV together

Interaction: Comcast will soon make services like video on demand and e-mail available on the boob tube.

March 27, 2000|By Michael Stroh | Michael Stroh,Sun Staff

Are couch potatoes doomed?

Last week, Comcast of Baltimore offered a sneak peek at a new wave of cable television services that may make passive viewing a thing of the past. Coming soon to a couch near you: e-mail, Web surfing, online banking and shopping, and even long-awaited video on demand.

Although Internet use has soared in recent years, Americans still spend more time glued to the tube than to their home computers, according to Nielsen Media Research. As a result, media companies are shifting strategy -- instead of trying to lure television junkies to the computer, they're attempting to bring the PC to the TV.

Comcast isn't the only one eyeing the technology.

In the wake of its merger with media giant Time Warner, America Online is ramping up to launch AOL TV, which would offer subscribers familiar AOL services such as e-mail and Instant Messaging, as well as entertainment, news and sports programming from Time Warner.

AOL plans to deliver the service through its newly acquired cable network and partnerships with direct broadcast satellite providers such as DirecTV.

Microsoft, meanwhile, is still plugging away with its 4-year-old Web TV interactive service.

The draw for all these companies is money. Between new advertising, e-commerce and subscription opportunities, interactive TV services are expected to generate more than $20 billion by 2004, according to Forrester Research.

Comcast has paved the way for these interactive services with a multimillion-dollar upgrade of its cable network in Baltimore, Harford and Howard counties from analog to digital. Meanwhile, companies that make cable boxes have introduced a new generation of "smart" digital set-top boxes that blur the lines between PC and TV.

Among the technologies Comcast officials demonstrated last week were Sofa Mail and Sofa Surfer, which would allow simple e-mail and Web browsing. "It's cool for people who don't have a computer," said Gary Helmstead, Comcast's director of technical operations. "It takes the Internet down to a cheaper level. But it doesn't replace your home PC."

The company also has its eye on two other popular interactive services, shopping and banking. At last week's demonstration, they showed off a system that made it possible to order a pizza and call up a checking account balance with a TV remote control.

The difficulty, Comcast officials say, isn't so much the technology, but the low-tech hitches: signing up partners such as restaurants and banks, and designing an on-screen guide that can encompass all these added services and still make sense.

"There's going to be so many channels when you turn on your TV in the future. There's not only going to be a guide for channels but what you want to do," said Helmstead.

Even so, the technology that drew the most interest last week was video on demand, the elusive Holy Grail of the broadcast industry.

Over the years, companies ranging from Bell Atlantic to Time Warner have experimented with systems that allow customers to watch movies whenever they want, but until recently the technology appeared to be too pricey, too buggy, or both.

Now, with the price of equipment and digital storage dropping precipitously, several companies are marketing video-on-demand systems for cable operators.

Comcast is conducting small-scale tests of the technology in several of its markets, as is Time Warner. A few small, independent cable operators already offer video-on-demand service to their subscribers. By 2005, video on demand is expected to make up 15 percent of video rentals.

Comcast's existing digital cable service repeats films every 30 minutes, and its library is limited to a dozen or so titles. In the video-on-demand system demonstrated last week, movies are stored in digital format on computers at the company's headquarters and dished out whenever subscribers select them with their remotes. Each of the new refrigerator-sized servers can hold several hundred films, officials said.

At home, subscribers would see an interactive menu that would allow them to search for a film by actor, director, studio or year of release. And that's not all. As with a videotape or DVD, once a movie is started, viewers can tap their remotes to pause, fast-forward or rewind them.

While Comcast officials offered no firm timetable for the new services, they said there's no doubt where the industry is heading.

"It's going to come," says Doug Sansom, area vice president. "It's just a question of when."

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