SEATTLE (Reuters) – Microsoft Corp.’s decade-long push into television is notable for false starts, bold promises and failed investments, but the company hopes to finally move into the living room this year with a service delivered over high-speed Internet networks.
The success or failure of Microsoft’s Internet Protocol TV (IPTV) initiative could determine the fortunes of a number of telephone companies betting billions that the company can help them encroach on cable television operators’ home turf.
Unlike the video clips uploaded to Web sites like YouTube, which depend on normal consumer Internet connections, IPTV gets priority from phone companies, using the main highways or backbone of the Web to deliver television programs with nearly all the features available from cable or satellite TV.
Microsoft sees a future when its IPTV platform will make a television set not linked into an IP network seem as obsolete as a personal computer today without access to the Internet.
“Microsoft’s been successful signing up customers to date,” said Michelle Abraham, principal analyst at research firm In-Stat. “But the large-sized, commercial deployments haven’t happened so there is a lot that is unknown.”
Fourteen telephone carriers around the world have signed up for Microsoft’s IPTV platform including BT Group, Deutsche Telekom AG and AT&T, but none of those companies are selling the service yet beyond tests.
Microsoft hopes its IPTV software will eventually open up the TV to a world of services already on the Web, such as shopping, e-mail and instant messaging. With 1.6 billion televisions in the world, the opportunity is immense.
For now, it is more interested in making sure it can match the features available in cable and satellite TV with some new bells and whistles, such as faster and easier channel and program surfing with picture-in-picture capability.
$13 billion industry?
Microsoft has spent the last decade trying to crack the TV market with billion-dollar investments in cable and telecom companies, numerous attempts at moving into the set-top box with limited success and an acquisition of WebTV, a service to allow people to browse the Internet through a TV set.
None of these investments delivered the results Microsoft had hoped: a prominent place near the couch.
This time, Microsoft thinks the technology infrastructure and, more importantly, the consumers are finally ready for IPTV, an application that is one of the most complicated ever run on computer servers.
IPTV, along with Microsoft’s Xbox video game console and its Zune portable media player, is part of the company’s push to move beyond the office and into the living room.
“IPTV is a huge growth initiative. It’s huge for us, it’s huge for our partners,” Microsoft Chief Executive Steve Ballmer told analysts in July. “Count the number of TVs (and) you don’t have to get a lot of money per TV per year to start feeling kind of excited about the size of the opportunity.”
Industry research firm Gartner predicts the number of global IPTV subscribers to reach 49 million and revenue to top $13 billion in 2010. Last year, three million IPTV subscribers generated revenue of about $400 million.
German conglomerate Siemens AG beat Microsoft to market with small IPTV roll-outs in Europe and Asia.
In the United States, AT&T is investing about $5 billion to build out a fiber-optic network to neighborhoods in their 13-state coverage area. AT&T plans to carry its “U-Verse” television service, built on the Microsoft IPTV software package, over that network.
AT&T, the largest U.S. telephone carrier, aims to make “U-Verse” available to 19 million homes by 2008, starting with commercial deployment in 15 to 20 markets by the end of 2006.
Verizon Communications Inc. is spending nearly $23 billion to lay fiber lines all the way to people’s door step and offer a video service that combines features of a cable network and Microsoft’s IPTV platform.
The technology is still largely untested since AT&T has yet to offer high-definition video as part of its testing. Installations for the new service are taking longer, but Microsoft says these are just normal growing pains.
“Sometimes people lose sight of how ambitious this is,” said Enrique Rodriguez, who took over as the new head of Microsoft’s TV business in April. “We’re not there yet in meeting 100 percent of our objectives, but we are on our way.”
One additional benefit to Microsoft is that the Redmond, Washington-based company’s IPTV platform will require a slew of Windows-powered servers to gather and stream content.
Currently, one server can service about 500 to 700 set-top boxes, but Microsoft said it expects improvements to soon push that number above 1,000 set-top boxes per server.
Fuente: Reuters, Daisuke Wakabayashi