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Coming to a TV near you: A Web that looks just like television

September 16, 1997

NEW YORK (AP) _ Sellers of Internet devices for television are coming to grips with what any seasoned couch potato already knows: The living room is for watching TV, not surfing the World Wide Web.

Except, that is, if the Internet makes TV cooler and easier to view.

That realization is behind new strategies this week by Microsoft’s WebTV Networks Inc. and NetChannel Inc., two competing providers of services that enable people to cruise the Internet on TV sets.

Both require people to buy electronic boxes to deliver the Internet access, as well as to pay a monthly fee of about $20 for the Web service. The boxes, which sit atop the TV set, enable users to retrieve electronic mail and surf the Web on their current television sets using a remote-control device.

WebTV’s existing service primarily delivers conventional Web pages to TV sets. But following a similar announcement Monday by NetChannel, WebTV plans on Tuesday to unveil technology that enables TV viewers to easily check out reviews on their favorite shows, click onto a Web site about a celebrity actor, and “hot link” to entertainment chat groups.

NetChannel boasts a guide to current and upcoming TV programs, splashed with Web icons that users can click for more information.

“NetChannel is the Internet and television. It is not the Internet on television,” NetChannel chief executive Philip Monego said, poking at his rival at a Manhattan press event sponsored by the San Francisco start-up company.

The moves come as marketplace realities clash with the much-hyped push by high-tech companies to expand their sales into the living room. About 20 million American homes currently have access to the Internet, nearly all through personal computers.

In order to attract people not yet online, companies have been hard at work at new ways to woo them. But WebTV has drawn only about 100,000 subscribers since its launch last year. New home computers that enable people to also watch television are selling slowly.

Tuesday’s announcement gives the best idea yet of how Microsoft Corp., which bought WebTV Networks in April for $425 million, intends to transform the novel device into a mass-market product.

Analysts say that TV watchers most of all want to entertain rather than inform themselves.

“Web TV’s announcement this week is really a baby step toward correcting that issue,” said Greg Wester, an industry analyst at the Boston-based Yankee Group.

“We’ve hit the motherload when the medium actually becomes a medium for entertainment,” he said.

The new technology also starts to address another issue holding back acceptance: Slow access to the Internet caused by slow computer modems and bottlenecks in telephone lines taxed by the explosion of Web data and images.

WebTV still will use phone lines to ship Internet data. But WebTV now comes equipped with circuitry that makes icons appear on the screen to notify cable and broadcast viewers of relevant Web sites they can instantly click to. And it includes a telephone modem able to receive 56,000 bits per second, double the rate of the current device’s modem, according to people familiar with the new service.

Details on the new WebTV service were first reported Monday by The Wall Street Journal.

Spokespeople for WebTV, Sony Electronics Inc. and Philips Electronics NV, which sell the set-top device, declined to comment ahead of Tuesday’s announcement.

For its part, Monego said NetChannel hopes to sign up cable companies so that it can start providing high-speed Internet access through means other than phone lines.

A third provider of Internet service, Worldgate Communications of Bensalem, Pa., has already made progress.

The small start-up company is rolling out Internet service, delivered via cable lines, that in effect adds the Internet as another premium cable channel to people’s homes.

The service, currently available in Long Island, N.Y. and St. Louis, Mo., has some big backers including cable TV operators and the two biggest makers of cable television equipment, Nextlevel Systems and Scientific-Atlanta.

Hal Krisbergh, chief executive of WorldGate, envisions a vast new Internet market in the 65 million U.S. households that get cable TV.

In addition to faster Internet access, WorldGate is trying to draw consumers to its cheaper price. Its service costs only $12 a month for unlimited Internet access.

In contrast, WebTV and NetChannel cost $20 a month for their service and require consumers to buy a set-top device ranging in price from $200 to $400.

But is Krisbergh intimidated by Microsoft, which has a reputation of under-cutting the competition? The world’s biggest maker of PC software has invested $1 billion in Comcast Corp., the nation’s fourth-largest cable operator, and is trying to persuade cable operators to adopt its technology as the industry standard.

“If you think I go to sleep at night and don’t think about Microsoft, of course I do,” Krisbergh said.

But, he added: “If (Microsoft chief executive) Bill Gates started to make airplanes, I’d say, ‘What does he know about airplanes?’”

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