MSFT's troubles with their advanced platform may offer a great opportunity to OPTV and LBRT. Even CEO Steve Ballmer's personal visit to TV Cabo and other personal attention to the project has not allowed the relationship to prosper. I read in an Associated Press article that TV Capo had expected 100,000 iTV subscribers by the end of this year and so far only about 2,500 have come onboard. I am sure many in that camp are thinking: "Ouch!" In addition, technical problems remain. Along with problems with UPC, MSFT is giving bad signals to the European market which has shown greater attraction to iTV.
I have maintained my patient, long-term approach to the Davids stacked against MSFT's financial resources in the middleware market: OPTV and LBRT. I am viewing trends and generally believe these trends are upward for the middleware interactive television market and if these two firms can hold off MSFT, they can both prosper.
OPTV's software is in 20 million boxes, they dominate the satellite business, they own Static 2358 in the interactive games sector, and have integrated the technology of what was formerly Spyglass; an example is Mosaic. They have also a President whom I respect named Marty Leamy, a holdover from Spyglass. I am amazed though that they have not made money even with 20 million boxes deployed. LBRT has somewhat over one million boxes deployed, is stronger in the cable television market, is often credited with having the better technology for the newer boxes, has what is often perceived as a charismatic leader in Mitch Kertzman, but is also unprofitable to date. While both firms project a profit within the next few quarters, I will believe it when I observe it.
Interactive television has taken hold much more strongly in Europe; I have heard raves about BSkyB's satellite service through OPTV. One may argue though that the the iTV jury is still out for the States. I believe a significant key to LBRT in the States is whether they can convince the cable companies to go interactive; the cable market is growing much slower than the satellite and LBRT's trick will be to convince the cable folks that per household profit will increase with interactive, be through ordering products via television or accepting a higher monthly fee. A hopeful sign is Insight Communications in Ohio, which in a Reuters article, has increased per account revenue by 20 USD monthly and reduced churn to 1.5% by embracing iTV. You can bet others in the sector have noticed those numbers.
I reiterate that absent a MSFT challenge, OPTV and LBRT can both do well globally, but if not these firms can have their still lofty market capitalizations melt like so many other firms these days. As a technophile, my inclination is that people will be attracted to what interactive television has to offer and the cable company owners who invest will profit, hence my hope for the future.
All my best,
Osman. |
