Direct-broadcast-satellite companies have tried to stay at least one step ahead of cable television in the race to provide digital pictures and sound, more networks, and more pay-per-view channels.
Now, the satellite forces are trying to leap ahead of cable in a new arena: enhancing TV programs with data from the Internet.
Spurred by the futuristic pronouncements of Tele-Communications Inc. honcho John C. Malone, the cable industry plans to deploy computerlike converter boxes over the next three years that personalize programs and advertisements, surf the Internet at warp speed, and make purchases at the touch of a button.
Satellite companies don’t have the two-way capacity that TCI and its brethren are gradually building into the cable networks, so they may never be able to match the cable industry on some interactive services. But they’re still likely to be the first in many parts of the country to provide a new generation of TV programming, one that lets viewers pull more information out of each channel.
Hughes Network Systems, the parent of DirecTV, and Echostar Communications Corp., the parent of the Dish Network, already are using satellites to pump information to personal computers. In a few months, DirecTV plans to offer a TV service for personal computers that enhances the networks’ programs with data such as World Wide Web pages. And next year, both DirecTV and Primestar, the satellite service mainly owned by five cable companies, expect to provide such services to their subscribers.
Digital satellite services employ a dish the size of a small birdbath to receive TV signals from a satellite orbiting in sync with the Earth’s rotation. The dishes, which are mounted on an outside wall, roof or lawn, feed a converter box inside the house connected to the TV.
The services deliver CD-quality sound and sharper pictures than over-the-air broadcasts and, in many cases, cable TV. They do not generally provide broadcast networks or local stations, however.
The big question for both satellite and cable companies isn’t what they might be able to do with their technology. It’s what consumers might want to see beyond conventional TV.
“We don’t know what people are going to want to do in their living rooms,” said Avram Miller, vice president of business development for Intel Corp. of Santa Clara, Calif. “A lot of experimentation needs to take place.” Intel has its own entry in the convergence arena, called Intercast, a technology for adding data to TV programs.
Some of that experimentation is already taking place in Europe, where satellite services have a much larger percentage of the TV audience than in the U.S. Intel has teamed up there with The Fantastic Corp. of Switzerland, whose technology enables communications companies to blend broadcast video, World Wide Web pages and other data streams.
Peter Ohnemus, president of The Fantastic Corp., described how adding data to TV programs can create a richer, more personal and interactive experience. For example, a viewer watching a baseball game could call up players’ statistics or personal Web sites, and advertisements could be digitally inserted on the stadium walls to fit viewer preferences.
Up-to-the-second information can be sent along with a program, Ohnemus said, whether it be stock quotes or blood-pressure readings for raceway drivers.
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Before the satellite companies can bring such services to the U.S., however, they need smarter converter boxes. Today’s TV sets and satellite receivers aren’t built to store or display streams of data–they don’t have the necessary computer chips, memory or disk drives.
Nor do most cable converter boxes, for that matter. The only things that come close in the world of set-top boxes are Microsoft’s WebTV and RCA’s Network Computer, which were designed to bring the Internet to TV sets via phone lines.
To get around that problem, DirecTV’s first stab at the next generation of television will be broadcast to personal computers. In effect, the PC will act as the smart converter box.
Ed Huguez, vice president of DirecTV’s new media and interactive group, said the company will start selling a plug-in card for PCs in the third quarter of this year. The card, whose price has yet to be announced, will enable subscribers to watch DirecTV on PCs equipped with Windows 95 or Windows 98.
Naturally, people eager to plug DirecTV into their PCs will have to buy a satellite dish. They will not need a converter box, however–their PC will serve that function.
The PC venture is a steppingstone for DirecTV to an enhanced programming service for TV sets, which Huguez expects to see next year. Like the cable companies, DirecTV is working with high-tech firms from Silicon Valley and beyond to develop a set-top box with the necessary smarts and capabilities.
A major difference between the competitors, though, is that Huguez does not envision DirecTV giving users an open portal to the Internet, as some cable companies plan to do. For that service, satellite devotees will have to turn to a different enterprise, DirecPC–a pricey high-speed download service.
Although two-way communications are possible via satellite, they can be expensive and impractical for services done on a national scale. That’s why DirecPC and other satellite services require users to use a telephone line and a regular computer modem when sending back information.
The Internet issue may be the direct-broadcast-satellite companies’ Achilles heel. The satellite services can pump a bunch of popular Web pages to users’ homes, but they cannot give users a gateway to the Internet without tying up their phone lines.
Nor is it practical yet for these companies to tailor what they transmit to individual tastes. Instead, they broadcast the same broad set of items to all viewers and let the viewers (or their converter boxes) do the filtering.
The cable companies can potentially offer complete two-way service because they have far more capacity on their coaxial-cable and fiber-optic networks. “The technology’s a slam dunk. Fiber optic’s going to win,” said Jim McDonald, president of Scientific Atlanta Inc., a cable and satellite networking company.
On the other hand, said Joel Ginsparg, senior vice president for technology and operations at Primestar, the battle isn’t to do the most exotic things–it’s to do what most people want. “Our aim,” he said, “is mainstream America and the mainstream TV experience.”