September 29, 1998
New TCI Unit Plans to Create
Interactive Cable Programs
By LESLIE CAULEY
Staff Reporter of THE WALL STREET JOURNAL
Liberty Media Corp., the programming arm of Tele-Communications Inc., is forming a new unit to develop interactive programming, and aims to convert one channel on TCI systems into a dozen or more digital channels, according to executives familiar with the plan.
The moves, if all goes according to plan, would give Liberty a huge platform for launching interactive services, including home shopping, ticket-ordering and banking. About 33 million households are located within the geographic reach of the cable systems of TCI and its affiliates. TCI has about 10 million actual subscribers; the channel deal would be focused initially on those customers.
Liberty is the entity that will be left on its own, essentially, once AT&T Corp.'s purchase of TCI closes next year. Liberty will be headed by TCI Chairman John Malone, who has presided over it for years from his perch at TCI. AT&T in June announced plans to buy TCI for $31.8 billion in cash and stock, which included a cash payment of $5 billion to Liberty, essentially with no strings attached. Any channel arrangement between AT&T and Liberty wouldn't go into effect until the AT&T-TCI merger closes.
Lee Masters, currently president and chief executive of Comcast Corp's E! Entertainment Television unit, will be president and chief executive of the new interactive unit, called Liberty Interactive. In an interview, Mr. Masters described the channel that Liberty expects to receive as "beachfront property. It's a great asset."
Bruce Ravenel, a TCI executive vice president, was named the unit's executive vice president and chief technology officer. Mr. Ravenel said he thinks industry conditions may finally be right for the technology. After years of false starts, digital set-top boxes, necessary for delivering interactive services to the home, are on track to be deployed broadly beginning next year, he said.
Cable companies, meantime, are continuing to upgrade their old cable plant quickly to handle an array of so-called two-way services, including phone service, high-speed data connections and, eventually, interactive services. "The technology is all but upon us," Mr. Ravenel said.
TCI customers could be among the first recipients of interactive services. If all goes as planned, Liberty will use compression technology to convert six megahertz of bandwidth on TCI's systems, the equivalent of one analog channel, into 12 to 15 digital channels. The new digital channels would then be used to zap all sorts of interactive services to TCI customers.
Mr. Masters, who will join Liberty Jan. 1, said he hopes to "come up with a whole array of mouth-watering content" that Liberty eventually can deliver to viewers across the U.S.
He said Liberty's interactive unit will be open to business opportunities including possible acquisitions, partnerships and other creative collaborations. |
