Coming to a set-to box next week — AOLTV, the latest shimmering facet of America Online Inc.’s strategy to provide its 23 million members with access to its services from anywhere, over any device.
AOLTV made its debut at the Consumer Electronics Show in January. At the
annual Las Vegas event, America Online boldly launched its
services based on non-personal computer Internet access.
After nearly 16 months of testing set-top appliance and AOLTV content
development, AOL’s alliance in conjunction with satellite programmer DirecTV will be ready for public
scrutiny early next week.
AOL, Microsoft Corp., and other
technology heavyweights are vying for huge advertising payoffs and e-commerce
profits, when consumers can tap into goods and services from their sofa.
Research firm Jupiter
Communications Inc. forecasts that interactive TV will reach 30
million U.S. households and by 2004.
David Card, a principal analyst at Jupiter , noted that AOLTV
plans a three-step path toward interactive television, or iTV.
“America Online uses the phrase AOLTV as an umbrella term for strategies
that the company hopes will give it a strong position in TV,” Card said in
his iTV report. “The strategies make sense, but TV ‘carriers,’ particularly
cable multiple systems operators are still the gatekeepers.”
If the AOL, Time Warner Inc.
merger is approved with RoadRunner franchise agreements
intact, multiple cable system operators would be the least of AOL’s worries.
AOLTV set-top boxes are manufactured by Hughes Electronics Corp.
and Philips Electronics
N.V. . The devices are based on Intel Corp.
architecture, while Liberate
Technologies Inc. developed the software.
The boxes are relatively inexpensive to produce, because the devices do
not required fast processors or large hard drives. Pricing for the
consumer launch of AOLTV has not been announced.
AOLTV will feature services akin to its Web line-up, including e-mail,
Web-based browsing, and its much-maligned proprietary instant messaging
access. In additional to popular online services, AOLTV will feature
program search guides and reminders.
AOLTV is designed to rival Microsoft’s WebTV devices, but will also include video recorder-like functions on its devices that will ship early next year.
AOL invested $200 million in personal television creator TiVo, Inc. earlier this
week and plans to incorporate TiVO’s VCR-like features into its branded set-top boxes. Microsoft does not offer such a feature at
this time, but its set-box manufacturer could remedy the feature gap just
in time for the holiday sales season this year.
At stake in the rush to develop the iTV market in the U.S. is the
opportunity to profit from advertisers ready to sponsor programming and
commercials over the new interactive medium. Jupiter estimates that the
industry segment may generate as much revenue as $10 billion in four years.
If the industry leaders have their way, consumers may be in store for an
onslaught of interactive infomercials before the year’s over.
