TV: the Next Portal War
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The confluence of cable companies accelerating their roll-out of digital video and the growing influence that PCs are having as entertainment hubs in the consumer electronics world has created a familiar-looking land grab heating up in the software sector.
This time, the inspiration for the burgeoning sequel to the Portal Wars are Interactive Programming Guides (IPGs), the complementary content service accompanying digital video delivery that is really just an evolution of the more static Electronic Program Guides (EPGs) that now fill viewers' screens with lists of what's on.
Analysts say as IPGs become more sophisticated, they are growing in importance as the critical "real estate" where viewers park their eyes before jaunting off to their 200-plus channel digital cable universe.
"The new generation of EPGs -- IPGs -- will help consumers find all of their multimedia content, whether it comes from a broadcast channel, an on-demand service, their Personal Video Recorder (PVR), or even music, photo image files or video clips from their PC," Gerry Kaufhold, principal analyst with In-Stat/MDR, told internetnews.ocm.
Industry players and analysts alike agree that the evolution of the guides, which (as the name implies) are dynamic, intuitive and even capable of serving up targeted ads, has a similar theme to the land grab that gave rise to the storied portal battles from the dot-com boom of the mid-1990s, starring Alta Vista, Yahoo!, Netscape and Microsoft.
And like the browser wars of the 1990s, Microsoft is moving to gain a strong position in the emerging IPG space, alongside perennial long-time player Gemstar-TV Guide, which still holds many patents on earlier forms of EPGs. In fact, earlier this week, Microsoft engaged two companies overseas (Nikkan Hensyu Center Co. Ltd. in Japan and Broadcasting Dataservices Ltd. in Europe) in order to provide the necessary content so it could accelerate the roll-out of its Windows XP Media Center Edition to other parts of the world.
Just like the browser, IPGs are becoming a necessity. Without an interactive programming guide as the user interface, consumers won't get much use out of digital video. And as momentum builds in the background for home networking, the emergence of a digital hub relies on a simpler user interface, said Vamsi Sistla, a senior analyst with tech research firm ABI.
IPGs are creating expanding market opportunities for technology and software companies alike, In-Stat/MDR said. Unlike free browsers, IPGs take in tidy monthly service fees from cable operators for each set top box that runs their software, which includes more than 85 million digital boxes already in use worldwide, said Kaufhold. Typically, cable operators take in about 75 cents per IPG deployed on the set-top box, he said.
Digital cable companies such as Time Warner Cable and Comcast, in the midst of major rollouts of video-on-demand and new interactive features on digital cable systems, are now testing Microsoft's new IPG software with "managed content services" that include more enhanced search terms for programming and new interactive data served up alongside the programming.
The trials of the IPG software features include pay-per-view (PPV) functions, video-on-demand (VOD) listings and other services in one integrated platform, using Motorola DCT2000 set-tops.
You could say Microsoft's IPG software platform does serve as a portal of sorts, said Ed Graczyk, marketing manager for Microsoft TV.
"It's much faster, there are fewer presses of the remote control," he said of the new platform, which was built on Microsoft's .NET platform.
"There are lots of things people would love to do with their TV, that cable companies would love to offer such as news, weather, even teletext, lottery, travel," he said.
"In addition, from the cable operator's perspective, they want to be able to extend their brand to their consumer." With the Microsoft TV IPG platform, the cable operator has a new information channel environment, with menu items and options to delve farther into categories while providing promotional help, even sending more targeted ads to the viewer, he said.
"The Microsoft TV IPG can be run in less than a megabyte, so it can work in today's digital cable set top boxes," Kaufhold wrote in a recently published 96-page report on the EPG Sector ("Electronic Program Guides: 'Navigating' Through a Changing Market"). "This means that the Microsoft IPG can be widely deployed by a pay-TV system operator, using their current model of set top box."
In addition, Microsoft deploys a "carousel" approach to the content that is continually streamed in a preset sequence. Such a system can feed interactive "content" such as weather updates, sports scores and news "crawls," that become available whenever the end user clicks on a special part of the remote control, the report said.
As was the case in the Browser Wars, Microsoft has shown its might. But will it also likely prevail in the new arena of IPGs? Find out more on Page 2.