Gates to challenge BSkyB over digital
PAUL FARRELLY CITY EDITOR
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10/12/97
The Observer
Page 001
(Copyright 1997)
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BILL Gates' Microsoft is to test-launch new television technology with leading ITV and cable firms - and possibly the BBC - early next year in a growing threat to Rupert Murdoch and BSkyB's dominance of digital TV.
The pilot scheme forms part of Gates' ambitions to extend his Windows computer software to digital TV and the internet's world wide web. BSkyB has just linked up with Gates, who met Tony Blair at Downing Street last week, to provide access to Sky News' web site through Microsoft's new Internet Explorer.
But so far, Rupert Murdoch has resisted Gates' attempts to make Windows the standard technology for interactive services, like home shopping and banking, through BSkyB's own set-top decoder box when digital TV is finally launched next year.
Microsoft has been in talks with Carlton and Granada, partners in British Digital Broadcasting, which plans to launch 20 terrestrial digital TV services later next year. The pilot scheme, scheduled to start early next year, will see Microsoft try out a new box that gives TV viewers separate access to interactive services on the internet. Through WebTV, bought for pounds 268m in June, Microsoft also plans to offer 'enhanced TV', a combination of pictures and information on screen.
Microsoft already has a pounds 630m stake in Comcast, the US cable operator, and US regulators are watching its TV ambitions.
'To BSkyB, it's definitely a threat. And with the attempts to integrate, you have the embryo eventually of a PC/TV,' said one media analyst.
BSkyB still aims to take the lead in the digital terrestrial television market, with 200 new channels in 1998. It has already placed orders for 1 million TV set-top boxes with firms including Pace, Amstrad and Panasonic.
Instead of Microsoft, it is using Open TV, a joint venture between Sun Microsystems, Gates' bitter US rival, and Thomson of France, to provide the software for interactive services.
Industry sources say, however, that development of the software has delayed production of the box. |
