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Comcast to Test Microsoft Software with More Pay-Per-View Choices

Posted on: Tuesday, 10 June 2003, 06:00 CDT

Jun. 10--In its latest attempt to expand into the lucrative cable television business, Microsoft Corp. on Monday unveiled new software that promises to give consumers more flexibility and choices in ordering movies and other programming at home.

Giant cable operator Comcast Corp. plans to begin a trial of digital set-top cable TV boxes powered by the software later this year, Microsoft Chairman Bill Gates announced Monday at a cable industry trade show in Chicago.

The companies aren't saying yet where the test will take place, but if it goes well, Comcast could roll the software out to its 21 million customers.

Separately, Mexico's largest cable operator announced plans to begin deploying the software later this year.

Microsoft is a major investor in Comcast, the nation's and metro Atlanta's biggest cable operator. But the agreement announced Monday is still a coup for the software giant, which has struggled for about a decade to gain any sort of foothold in the cable TV business.

"Today is without a doubt the biggest day in the history of the Microsoft TV group," said Ed Graczyk, marketing director for the company.

Cable operators have long promised video-on-demand systems, through which customers can, for a fee, watch movies or other programming whenever they want.

But with few exceptions -- Time Warner Cable offers interactive and video-on-demand services in a few markets -- cable providers have been slow to deliver. That's because such systems traditionally require new set-top boxes and other hardware, an expensive proposition.

Microsoft's TV Foundation Edition software platform is designed to work with today's set-top boxes and therefore could cut deployment costs significantly, Graczyk said. Cable companies that pay an undisclosed software license fee to Microsoft can simply install the software on their networks and automatically make set-top boxes ready for video-on-demand.

Microsoft's software also promises more features than current video-on-demand systems available today for both cable operators and subscribers, according to Graczyk.

While the new software is promising, industry watchers viewed it with caution.

"There's certainly no guarantees here, and historically they've not had a whole lot of luck getting cable companies to adopt their technology," said Matt Rosoff, an analyst at Directions on Microsoft, an independent research firm.

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To see more of The Atlanta Journal-Constitution, or to subscribe to the newspaper, go to http://www.ajc.com

(c) 2003, The Atlanta Journal-Constitution. Distributed by Knight Ridder/Tribune Business News.

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