UltimateTV Takes to the Sky
Taken from broadband-daily.com
Microsoft and News Corp have reached a deal to develop an upgraded version of the UltimateTV personal video recorder (PVR) for use in Rupert Murdoch's Sky Global Networks (SGN) global satellite-broadcasting network. Microsoft hopes to use the deal to push UltimateTV service – currently only available in the US – into new markets worldwide. But the arrangement isn't necessarily bad news for OpenTV, which is one of the main suppliers of interactive TV (iTV) technology to SGN, as well as being the current leader in the iTV middleware market.
Microsoft confirmed the deal on Thursday, characterizing it as a non-exclusive consulting agreement with SGN to "test and develop new products and services for deployment throughout SGN's worldwide network." The company's UltimateTV PVR is currently available in the US through DirecTV, the satellite service owned by Hughes Electronics.
News Corp is pursuing a deal – using financial support from Microsoft, which is reportedly around the $3bn mark – to merge SGN assets with DirecTV in order to create a global satellite powerhouse. If successful, News Corp will merge DirecTV and its 10 million subscribers with the rest of SGN's 85 million satellite homes in Asia, Europe and Latin America. Microsoft's consulting arrangement was first reported by the Wall Street Journal.
Certainly, with the PVR market set for rapid growth, Microsoft certainly doesn't want to let an opportunity to team with SGN pass it by. Consulting firm Analysys estimates that, by 2005, the number of PVR subscribers (27 million) will have surpassed that of broadband Internet subscribers (22 million). Growth will be spurred on by the integration of the PVR in set-tops.
"What we are going to see more and more is PVRs being integrated in set-tops provided by broadcasters," said Rupert Wood, an analyst at Analysys. PVR technology allows viewers to create a "DYI VOD [video on demand] experience," while allowing broadcasters to avoid the high costs of delivering network-based video on demand to big audiences, he added.
Despite the slow start, UltimateTV has fewer than 33,000 subscribers, according to some estimates, while TiVo has around 200,000 subscribers. Wood reckons that with quickly declining hard-drive storage costs and an audience familiarized with their capabilities, PVRs will be a big success. From there, PVRs will be a springboard to offering other interactive services, such as music and game downloads, to other consumer electronic devices.
An SGN partnership with Microsoft, which is keen to become a big player in the iTV market, has long been regarded as a potential threat for OpenTV, which has its middleware embedded in 16 million set-tops around the world, and counts News Corp's BSkyB as one of its main clients. "Murdoch loves OpenTV but, by default, he has to love Microsoft TV because of the lack of cash," said a London-based financial analyst who preferred to remain anonymous.
In response to the WSJ article, a BSkyB spokesperson said that the consulting deal does not affect BSkyB "at all" and that it has no plans to introduce UltimateTV technology in the foreseeable future. In the meantime, BSkyB will be launching next-generation set-tops in September. They will have features similar to those of UltimateTV, and will use technology from OpenTV and News Corp's NDS in set-tops built by Pace Micro Technology. BSkyB also has a marketing agreement with US-based TiVo for stand-alone PVRs.
As things appear now, however, the consulting arrangement doesn't portend to be a wholesale replacement of OpenTV technology in SGN's network. For one, Microsoft has invested in numerous cable companies, many of which have not launched services yet. The deal will probably entail both competitors working together to make sure the two products work side by side on SGN's networks.
Indeed, one source familiar with the proceedings indicated that SGN has been encouraging OpenTV to work with Microsoft, though details about how this will transpire are scarce. Working together could mean, for example, 'building' Microsoft on top of OpenTV software, and using Microsoft TV servers for high-end products in combination with the OpenTV middleware, one analyst speculated. Whether or not this is technically possible still isn't clear – OpenTV declined to comment.
However, OpenTV itself is interested in tapping into the lucrative market for iTV applications – it has boosted its content development capabilities recently with the acquisition of UK-based Static 2358. In this context, OpenTV could even become a provider of applications that work with Microsoft. |
