Netherlands-based MIH, a unit of SA`s MIH Holdings (MIHH), is taking computing giant Microsoft head-on in a technology venture that will e-commerce enable television sets.
OpenTV, a subsidiary of Amsterdam-listed company MIH, is a developer of interactive television software, which is being used internationally in homes utilising digital set-top boxes. This technology enables a TV to have similar functionality to an Internet-connected PC.
Microsoft is using similar technology in its WebTV product, which also allows users to e-mail, surf the Net and access instant messaging.
According to MIHH director Mark Sorour, network operators such as BskyB will use OpenTV`s technology to allow viewers to access e-mail and instant messaging as well as shop online via their TV sets.
The technology should be available to SA consumers next year, and Sorour says the head start that OpenTV has over competition will give it the market-edge.
Although Sorour says a company like Microsoft should never be underestimated, he believes broadcasters will be loath to allow Microsoft a foot in the broadcasting door to dominate the industry in the same way it dominates the PC market.
Garry Hodgson, consumer and commerce group director, Microsoft South Africa, responds: "Microsoft, through its subsidiary WebTV, has been providing consumers in the US, Canada and Japan with an interactive TV service for the last two years. Microsoft has already established itself in the set-top box market with this live service environment, which has a current install base of over 1.5 million subscribers."
Microsoft has already established relationships with a number of broadcasters worldwide including Columbia Tristar, NBC, HBO, Discovery Channel, MSNBC, PBS, E! Entertainment Television, The Learning Channel and The Weather Channel, which offer interactive TV content for the WebTV service.
Meanwhile, OpenTV has captured the operational clout of America Online, General Instrument, Liberty Digital, News Corporation, Time Warner and Sun Microsystems through a convertible preferred equity deal worth $31.25 million.
AOL will develop OpenTV applications, and Time Warner and Liberty Digital will assist with penetration of the cable networks. News Corporation`s set-top box already includes OpenTV software.
Sorour says the operational support of these six companies is "invaluable".
He is confident the technology architecture that OpenTV is using will give it the performance edge. Sorour explains that it is designed for the back-end of broadcasting systems, making use of a low memory footprint, which will keep costs down. Sorour does not believe Microsoft will approach design in the same way, which will give OpenTV the competitive-edge.
With regard to Microsoft technology, Hodgson explains: "We have taken all the knowledge and expertise we have gained from the WebTV service and created the Microsoft TV Client and Microsoft TV Server platforms to enable network operators to offer similar services in their geographies. These technologies are optimised to work together as a set-top box and a back-end system and includes support for industry standards like HTML.
"This ensures interactive TV content is easy to develop so that network operators and original equipment manufacturers can take advantage of the strengths of the Internet by utilising its associated technologies and their existing expertise," says Hodgson.
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