Is New Microsoft Offering Must See TV?

Responding to service provider and consumer trends, Microsoft this morning unveiled new software to help telecom and cable network operators deliver paid services to viewers.

Specifically, the company’s TV division has developed a new Internet protocol platform that uses video compression technology to reduce bandwidth requirements.

The system, which uses software in set-top boxes as well as the operators’ network, supports standard and high-definition channels, on-demand programming and interactive program guides, plus future offerings that will use two-way data transfers.

It will be tested by Bell Canada, which, like other telecoms, recently added satellite TV to its voice and data bundles. In all, about a half dozen other service providers will participate in test over the next year.

“Telcos are seeing an erosion of their core business and are trying to compete with cable operators. This helps put them on more equal footing,” Ed Graczyk, a Microsoft TV spokesman told

But Graczyk was quick to point out the offering’s other main target is the cable industry. Microsoft already has footholds there, including recent pacts with the top two U.S. providers, Comcast and Time Warner Cable, part of AOL Time Warner .

Microsoft TV Foundation Edition software and the Microsoft IPG is being tested with Comcast’s Seattle customers. IPG trials are also underway in Time Warner Cable’s Beaumont, Texas, market.

Redmond believes that service providers will be attracted by the end-to-end nature of the new IP TV platform. There are several players in the market for software that enables IPGs and advanced video services, one of the better known is Gemstar-TV Guide.

Many cable companies like it that way, saying they get better prices and more innovation from software companies that are competing against each other.

Microsoft’s Graczyk acknowledged this, but said others may prefer an end-to-end offering from a company with staying power. If not, the IP TV offering will be easily integrated with other technologies, he said.

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