Microsoft's vision of the TV of the future took a step forward on Thursday with a deal that could bring advanced TV controls into the homes of 5 million or more Comcast cable subscribers.
Comcast agreed to adopt Microsoft TV Foundation Edition 1.7 software for rollout to as many as 5 million subscribers, with an option to raise that number at a later date. Foundation Edition 1.7 lets cable companies and some other TV providers offer an interactive programming guide, navigation tools and advanced features for capturing programs on DVRs (digital video recorders).
Microsoft aims to play a big role in TV, working toward a technology it calls IPTV, which delivers TV over IP (Internet Protocol) networks. TV on an IP network effectively could have an unlimited number of channels and deliver commercials targeted to specific viewers rather than the entire audience of a show, Microsoft Chairman and Chief Software Architect Bill Gates said on Thursday in a keynote address at the Microsoft CEO Summit, in Redmond, Washington. It also would allow operators to send out updated commercials to be run with shows that viewers watched days after the original broadcast, he said. IPTV could be provided by telecommunications carriers and other IP network operators as well as cable companies.
Foundation Edition 1.7 is designed to work with a wide variety of cable set-top boxes, including advanced boxes with DVR and VOD (video on demand) capability. Among other things, it can keep a DVR from recording rerun episodes, set priorities for recording when showtimes conflict and show up to 14 days of program listings. Operators can customize the interactive subscriber interface and then preview changes to the interface and quickly send them out to set-top boxes, according to Microsoft.
The idea of an interactive program guide ultimately points to a "Google for TV," said Yankee Group analyst Adi Kishore. The Comcast deal is a good win for Microsoft, he said.
"Microsoft has had a tough time in the TV space," Kishore said. The company bought WebTV in 1997 but fell behind rivals with a slow rollout of new services.
But it is Microsoft's IPTV initiative, which taps into Windows Media Video 9, that may help the company tap into a growth market for video over data networks, Kishore said. Microsoft will use Windows Media Video 9 to compress video content, a critical step for getting through DSL networks that are short of the bandwidth needed for video, Kishore said.
The market for IP video is still nascent, but some telecommunications carriers are showing interest in video programming, Kishore said. Verizon Communications Inc. announced Wednesday that it began laying down a fiber-to-the-premises infrastructure in Keller, Texas, and plans to use it for video in addition to voice and data.
Video over IP has a better foothold today in Europe and Asia than in North America, Kishore said. There, the video industry is more competitive and less dominated by cable companies, and telecommunications carriers' local loops are shorter, making high-speed delivery more feasible, he said. Reliance Infocomm Ltd., which operates a converged voice, video and data network across India, last October announced it would work with Microsoft to deliver IP-based television services.