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To: Teflon who wrote (356)	9/22/1999 8:00:00 AM
From: NY Stew	Respond to of 6516

'Enhanced' TV Will Go Online More Easily New sets by RCA's Thomson and Microsoft's WebTV bring users online with less muss and fuss Date: 9/22/99 Author: Michael Lyster Microsoft Corp. and Thomson SA hope to turn channel surfers into Web surfers by taking a cue from the cable industry. By early next year, Microsoft and the maker of RCA TVs plan to roll out a line of ''enhanced TVs.'' They'll let viewers surf the Web, access electronic mail and shop online with the click of a remote control, the duo says. Bringing the Web to TV isn't new; past efforts using pricey computers and set-top boxes never caught fire. So what's new with enhanced TVs? They have all the electronics needed to go online within the sets themselves. ''We are talking about enhancing TV, not redefining it,'' said Lou Lenzi, vice president of new media for Indianapolis- based Thomson Consumer Electronics Inc., part of France's Thomson. Thomson, the top seller of TVs in the U.S., is taking the circuitry from Microsoft's WebTV set-top boxes and putting it inside some of its RCA and ProScan brand sets. By stripping away the set-top box, Thomson and Microsoft are taking the same path cable did into U.S. homes. Since the late-1970s, nearly all new TVs come with a tuner card for showing basic cable channels. That's helped push cable into two-thirds of U.S. homes. Microsoft and Thomson hope to do the same for enhanced TV. ''We see enhanced TV as a revolution, but it's a quiet revolution,'' said Phil Goldman, general manager of Microsoft's TV platforms unit and a WebTV founder. Thomson's electronic program guides are the starting point for enhanced TVs. These on-screen TV listings let you see what's on at a glance. To watch or even tape a show, you just click on its listing with a remote control. Thomson plans to ship 1.5 million sets with the guides this year. Enhanced TV buyers won't pay anything for the program guide, which is updated via a phone line linked to the back of the TV. Instant messaging also is offered for free. Lenzi says that feature is ideal for someone like his young daughter, who loves to chat online with pals as they watch their favorite shows. The giveaways offer TV buyers a reason to connect their sets to a phone line, Lenzi says. From there, the companies hope viewers opt for the Web-browsing and e-mail features of WebTV. For each enhanced TV owner who signs up for WebTV service at $10 to $25 a month, Thomson gets a cut. The extra electronics in enhanced TVs add $40 to the price of a set, Lenzi says. For now, the feature is set to be in only a handful of Thomson TVs. Microsoft already counts some success with WebTV, the most common way to access the Internet via TV. But even as Microsoft closes in on a million WebTV users, it's barely touched the nation's 100 million TV homes. But enhanced TV faces hurdles. Coach potatoes have balked at mixing computers with their TVs. In 1997, Thomson and Compaq Computer Corp. flopped with a pricey PC- TV unit dubbed PC Theatre. Thomson's Lenzi calls that a learning experience. ''Enhancing television is a great idea,'' he said. ''But when you venture too far from what the customer is used to, you end up addressing a very small audience.'' Microsoft and Thomson also need broadcasters and advertisers to bring interactivity to their programming. They're working with the Portland, Ore.-based Advanced Television Enhancement Forum, an industry group. The partners aren't alone. Rival Sun Microsystems Inc. also hopes to sell broadcasters on its TV software. And cable operators could bypass enhanced TV entirely by putting interactivity in their digital set-top decoder boxes. But enhanced TV, which stems from Microsoft's $75 million investment in Thomson last year, could be the best shot yet at bringing the Web to TVs, observers say. ''If this doesn't work, what will?'' asked Marjorie Costello, editor and publisher of New York-based industry newsletter Consumer Electronics Online News. ''Thomson, which knows the consumer, is taking the technology from Microsoft and bringing it to the mass market in a way it sees best.'' (C) Copyright 1999 Investors Business Daily, Inc.