Winfirst Chooses Canal+ as iTV Software Provider

Denver-based fiber optic networker Winfirst Tuesday chose Vivendi
Universal’s Canal Plus Technologies as its primary supplier of interactive
television (iTV) to 3.7 million homes.

Specifically, Winfirst will use the U.S. division of Canal’s MediaHighway
middleware and MediaGuard conditional access system on its network in
Sacramento and San Diego; Austin, Dallas, Houston and San Antonio, Texas,
and Seattle; and has received a temporary permit in Portland, Ore. Winfirst
is also pursuing regulatory approval in Los Angeles and the San Francisco
East Bay area.

Financial terms of the deal were not made public.

Based on protocols such as Java, the new system is designed to enable the
fiber optic specialist to provide its customers with a range of iTV
applications along with a channel lineup of digital video programming.

Canal also plans to develop new interactive content and services for
Winfirst, created by the combination of the Canal Plus Group and Universal
Studios’ businesses. Canal said it will work with Vivendi to provide
interactive network programming targeting advanced digital TV set-top boxes
and home PCs with high-speed data access.

The goal of both companies is to expand their tendrils of interactive
entertainment in the U.S., where it has been slower to take than in Europe.
To help do this, Winfirst is banking on super-charged fiber optic networks;
it is creating a new network designed to offer high-speed Internet, cable
and telephone service to residential neighborhoods.

The optical link will allow Winfirst to provide an Internet service that
will be some 65 times faster than typical 1.5 Mbps high-speed connections
offered via T1 or DSL and cable modem today. At such speeds, people may
download a DVD movie in eight minutes while carrying phone calls and
streaming a home video to a friend — all at the same time.

Canal’s MediaHighway is proven iTV software, having been added to more than
9 million set-top boxes worldwide. In addition to being Java-based it also
supports applications written in HTML, OCAP, DVB-MHP, MHEG-5 and other open
and proprietary formats.

MediaGuard is an access system that facilitates the delivery of secure
content and transactions across cable, satellite and terrestrial television
networks. Subscribers may choose how to pay, too — via pay-TV,
pay-per-view, video-on-demand, interactive retailing and other transactional

More than 20 digital operators and broadcasters have deployed Canal’s
software packages to their customers — mostly on an international basis.
Before Tuesday’s deal with Winfirst, At&T Broadband had been Canal’s only
other significant U.S.-based customer.

In commenting on the deal, Frank Casazza, president and chief operations
officer of Winfirst, said “coupling their software with our network allows
us to take digital TV entertainment in the U.S. to the next level.”

But it will also open up the competitive door a bit more in the U.S., where
firms such as Microsoft Corp. and OpenTV are the leaders in terms of iTV
software. The companies are seeking deals with cable TV providers to put
their software into cable TV set-top boxes for the lucrative market for
emerging iTV services.

According to information culled by Jupiter Media Metrix, interactive
television will grow 83 percent per year through 2005 in the U.S., reaching
almost 46 million homes.

And it will happen the way Winfirst is planning on doing it — on a regional

“The key for programmers and advertisers is to focus on delivering targeted
interactive applications and on realizing the value in regional audiences,”
the Jupiter report said.

Dealing with such a fragmented market won’t be easy, the research firm

“Even though iTV will be a viable platform for developers, content
programmers and advertisers alike, the market needs to understand that this
audience will be fragmented — by geography and by technology,” said Lydia
Loizides, Jupiter analyst. “Programmers and advertisers looking to target
the iTV audience must understand what can be delivered by cable or satellite
and plan their initiatives accordingly. Interactive TV programming and
services should take shape today for deployment tomorrow.”

Loizides also said it makes sense for companies to load up on iTV services
and technologies now because late entrants will be penalized once the market

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