Murdoch to double investment in GMST
Satellite Today via NewsEdge Corporation : NEW YORK - Control of the technology for set-top boxes and interactive program guides are crucial to the future of Sky Global Networks (SGN), worldwide media magnate Rupert Murdoch told the Sky Forum in a wide-ranging presentation here yesterday.
They are critical to SGN's ability to manage value-added services in all its satellite systems and even extend the company into the systems of its rival cable TV companies, Murdoch explained.
SGN is the subsidiary of Murdoch's News Corp. [NWS] that holds all of the company's varied satellite and related assets, ranging from its interest in British Sky Broadcasting and Star TV in Asia, where it has full ownership, to its stakes in set-top box technology supplier NDS Group [NNDS] and Gemstar - TV Guide International [GMST], which controls an interactive program guide.
''NDS, 80 percent owned by SGN, has pioneered the separation of the critical conditional access function from the set-top box with the introduction of smart card systems that allow access to scrambled content an protect it from piracy,'' Murdoch said. ''This allows us to work with multiple set-top box manufacturers around the world, whose competition reduces cost and accelerates the introduction of new functions, while we retain complete control of the set- top box and its features.''
Currently, NDS technology is used by about 40 percent of the world's digital satellite subscribers and protects about $9 billion in pay TV revenues, Murdoch added.
''NDS has also developed software for a third generation integrated digital personal video recorder - XTV - to be launched in the U.K. later this year,'' he said.
He also outlined three levels of technology and sophistication in set-top boxes that SGN is developing. The basic World Box ''will offer a universe of television channels vastly expanded from what cable presently offers in locales such as India and China and in other developing countries around the world.
''Our General World Box, a step up, will offer hard disk storage and TiVo- like functionality, in addition to hundreds of channels of movies, sports, news and general entertainment. This box is similar to the box in most satellite homes in the U.S. today,'' Murdoch added. ''Finally, our colleagues at NDS are developing what we've tentatively called our Super Box. It will have all the functionality of the General World Box, but will also include [the] Blue Tooth [wireless access standard] and other wireless technologies that enable the user to control nearly all household appliances through the television set-top box,'' he explained. The Super Box will be for the ''more affluent areas of Europe, Asia and Latin America.''
Murdoch turned next to the interactive program guide (IPG), pointing out that the company is doubling its investment in Gemstar - TV Guide International because ''we know that what Henry Yuen is developing at Gemstar not only works, but is essential to the interactive future. Powered by the popularity of the TV Guide brand, TV Guide's IPG is already in more than 10 million households, a figure that analysts [say] will double by the end of the year. By 2005, the IPB is predicted to reach 44 million homes worldwide; by 2010, 72 million,'' Murdoch said.
The TV Guide IPG will be deployed across all of SGN's satellite systems, he said. Gemstar and BSkyB are working on this right now and expect to announce it soon.
''And as cable operators in the U.S. continue to roll out their digital tiers, they are increasingly recognizing the need for TV Guide's IPG,'' he added.
Gemstar signed such an agreement with Charter Communications [CHTR] in February and with Comcast Cable [CCZ] about two weeks ago.
''These agreements come on top of a 10-year exclusive deal for deployment of the TV Guide IPG in all of AT&T's [T] digital cable households nationwide,'' Murdoch said. ''In fiscal 2001, Gemstar expects to generate nearly $100 million in interactive advertising revenue from its IPG; this in a difficult advertising environment. As the market recovers and as the IPG gains additional penetration both here and overseas, that number should grow exponentially,'' he added.
The third leg of SGN's worldwide tripod, Murdoch explained, is BSkyB, which is serving as the company's laboratory for the introduction of new services and features.
''Through BSkyB we have learned of customers' predominant desire to reach out through new technology. The more self-sufficient we become as individuals within this wired world, the more eager we are to create communities, virtual and otherwise. The popularity of such capabilities as e-mail and interactive games has demonstrated the importance of providing a social function to customers in any region.'' |
