The Changing Face of WebTV

Electronic News, April 26, 1999 by Peter Brown

Las Vegas -- WebTV was once a joke in the consumer market.

The idea that consumers, in bulk, wanted to surf the Internet together was once heavily criticized as a less than niche product. However, since Microsoft Corp. bought WebTV, no one seems to be criticizing it anymore.

The operating system giant has changed WebTV's business model, focusing it in three key areas: home, broadcasting and PC.

In the home market, where WebTV started, Microsoft still is focused on delivering Internet access to TV watchers. Microsoft also has updated its home marketing model to include other services as well, including linking digital camcorders or cameras to the WebTV box to take pictures and E-mail them on the Internet.

"WebTV is designed to bring new features to the TV experience and this might include TV shows on demand, home networking, 3D games and much more, including support for high definition," said Alan Yates, director of platform marketing at Microsoft WebTV.

On the broadcasting front, Microsoft now has formed a platform group that is focused on offering client and server software applications to OEMs and television service providers.

In doing this, Microsoft is pursuing a strategy similar to that of other interactive software companies. The strategy entails directly selling its products to the cable, terrestrial and satellite providers, instead of directly promoting services to consumers.

Microsoft is working on various agreements with digital cable, satellite and terrestrial suppliers. The company recently signed up the platform group with EchoStar to deliver the WebTV features along with digital television.

With interactivity becoming an important topic in the DTV world (see related story, this page), Yates believes it is a prime time for WebTV to make an impact in the market. It certainly has the financial backing in Microsoft and if it can garner some more design wins from the cable and satellite communities, WebTV may be the software interactive platform of choice for many U.S. residents in the near future.

The third focus is Microsoft's use of WebTV technology in the PC space. Microsoft has included WebTV in its Windows 98 operating system software. This allows PC users who have TV tuner cards in their PCs to access the features of WebTV.

Although Yates said the company has not built up the marketing of this technology in Windows 98 because the demand has not yet materialized, this may be an area of growth and technological innovation for WebTV and Microsoft to build on in the future.