Denver-based fiber optic networker Winfirst Tuesday chose Vivendi Universal’s Canal Plus Technologies as its primary supplier of interactive television (iTV) to 3.7 million homes.
Specifically, Winfirst will use the U.S. division of Canal’s MediaHighway middleware and MediaGuard conditional access system on its network in Sacramento and San Diego; Austin, Dallas, Houston and San Antonio, Texas, and Seattle; and has received a temporary permit in Portland, Ore. Winfirst is also pursuing regulatory approval in Los Angeles and the San Francisco East Bay area.
Financial terms of the deal were not made public.
Based on protocols such as Java, the new system is designed to enable the fiber optic specialist to provide its customers with a range of iTV applications along with a channel lineup of digital video programming.
Canal also plans to develop new interactive content and services for Winfirst, created by the combination of the Canal Plus Group and Universal Studios’ businesses. Canal said it will work with Vivendi to provide interactive network programming targeting advanced digital TV set-top boxes and home PCs with high-speed data access.
The goal of both companies is to expand their tendrils of interactive entertainment in the U.S., where it has been slower to take than in Europe. To help do this, Winfirst is banking on super-charged fiber optic networks; it is creating a new network designed to offer high-speed Internet, cable and telephone service to residential neighborhoods.
The optical link will allow Winfirst to provide an Internet service that will be some 65 times faster than typical 1.5 Mbps high-speed connections offered via T1 or DSL and cable modem today. At such speeds, people may download a DVD movie in eight minutes while carrying phone calls and streaming a home video to a friend — all at the same time.
Canal’s MediaHighway is proven iTV software, having been added to more than 9 million set-top boxes worldwide. In addition to being Java-based it also supports applications written in HTML, OCAP, DVB-MHP, MHEG-5 and other open and proprietary formats.
MediaGuard is an access system that facilitates the delivery of secure content and transactions across cable, satellite and terrestrial television networks. Subscribers may choose how to pay, too — via pay-TV, pay-per-view, video-on-demand, interactive retailing and other transactional services.
More than 20 digital operators and broadcasters have deployed Canal’s software packages to their customers — mostly on an international basis. Before Tuesday’s deal with Winfirst, At&T Broadband had been Canal’s only other significant U.S.-based customer.
In commenting on the deal, Frank Casazza, president and chief operations officer of Winfirst, said “coupling their software with our network allows us to take digital TV entertainment in the U.S. to the next level.”
But it will also open up the competitive door a bit more in the U.S., where firms such as Microsoft Corp. and OpenTV are the leaders in terms of iTV software. The companies are seeking deals with cable TV providers to put their software into cable TV set-top boxes for the lucrative market for emerging iTV services.
According to information culled by Jupiter Media Metrix, interactive television will grow 83 percent per year through 2005 in the U.S., reaching almost 46 million homes.
And it will happen the way Winfirst is planning on doing it — on a regional basis.
“The key for programmers and advertisers is to focus on delivering targeted interactive applications and on realizing the value in regional audiences,” the Jupiter report said.
Dealing with such a fragmented market won’t be easy, the research firm stated.
“Even though iTV will be a viable platform for developers, content programmers and advertisers alike, the market needs to understand that this audience will be fragmented — by geography and by technology,” said Lydia Loizides, Jupiter analyst. “Programmers and advertisers looking to target the iTV audience must understand what can be delivered by cable or satellite and plan their initiatives accordingly. Interactive TV programming and services should take shape today for deployment tomorrow.”
Loizides also said it makes sense for companies to load up on iTV services and technologies now because late entrants will be penalized once the market matures.
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