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AOL Drops Interactive TV Product

February 19, 2003

NEW YORK (AP) _ After a dismal consumer response, America Online has stopped selling its interactive television product, AOLTV.

AOL will continue to support current subscribers who use the product, which allows users to surf the online service and send e-mail from their televisions, AOL spokeswoman Anne Bentley said Wednesday.

``Right now we’re not marketing it,″ Bentley said. ``We’ve got future development on hold. We decide to roll out something or continue investing in something based on customer interest.″

The company hasn’t taken new subscribers since November. Bentley said AOL had shifted its interactive television development into AOL Broadband, which allows high-speed AOL subscribers to watch video and other high-bandwidth content that accompanies existing television shows.

The AOL vice president in charge of AOLTV, Carlos Silva, and other members of the development group have already moved to AOL’s broadband unit, Bentley said.

AOLTV launched in June 2000, giving enthusiastic investors and technology watchers a look at how the company might extend its influence from the personal computer to the TV set. AOL offered the service to users through a set-top box and wireless keyboard manufactured by Philips Electronics.

The company also promised a future, expanded AOLTV service that would be accessed from a TiVo personal video recorder. A deal with TiVo to produce the boxes fizzled and was pared down last April. Bentley said AOL and TiVo are still ``moving ahead″ on a yet-unannounced combined service.

``We may not continue developing distinct set-top boxes or AOL services for the TV set, but we don’t rule it out,″ Bentley said.

Microsoft has had its similarly high hopes for interactive TV dashed. The rollout of its premium iTV service was halted last year after it was introduced _ and mostly ignored _ in Portugal.

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