AOL offers first peek at TV service

Its demonstration leaves no doubt: AOL is ready to go head-to-head with Microsoft for the US Internet-via-television market

Internet giant America Online showed off its AOL TV service for the first time at the Consumer Electronics Show in Las Vegas on Thursday.

While the company stressed how the service was different from Microsoft's WebTV Networks, demonstrations left no doubt that Microsoft and AOL are once again ready to go head-to-head. "This is the biggest thing for us in 2000," said Carlos A. Silva Jr., vice president of the AOL Devices division's product studio. "We are aiming on bringing the best of AOL to the TV set."

The new service, which will debut in the US later this year, essentially allows you to surf the Web with your TV. AOL's service will also allow its members to chat with "buddies", as well as send and receive email. "All of our members tell us they want another way to be connected, besides the PC," said My-Chau Nguyen, vice president of marketing for the AOL Devices division.

While Nguyen would not discuss pricing, she indicated that AOL TV should be considered a premium service. "We are not a low-cost provider," she said, adding that even members would most likely have to pay additional fees for the service.

AOL's service outshines its rival WebTV Networks' in at least one way: Instant access to more than 20 million subscribers, easily trumping WebTV's approximately one million users to date. "When people wanted to sell video phones, you always needed to sell two," said Silva, referring to the fact that many devices can only communicate with others that own similar devices. "We don't have to do that because we already have 20 million subscribers."

Both Hughes Network Systems and Philips Electronics announced devices that will be able to connect to the AOL TV service. "Consumers want more control and personalisation of their television viewing experience," said Rob van Oostenbrugge, president and CEO of Philips Digital Networks.

The Hughes set-top box is both a DirecTV receiver and an AOL TV device, while the Philips receiver works with other satellite and cable services. Pricing for both products has not yet been announced.

The final piece missing from AOL's devices is the ability to pause live TV and search out and record TV programs to a hard drive for later viewing, a la the "personal TV" technology from TiVo and ReplayTV Networks

That will definitely be in a future product, said Richard Tatem, senior product manager for Hughes Network Systems' broadcast products and services division. "We are looking at that right now."

Both Philips and DirecTV have already announced products based on TiVo technology.

For full coverage, see the CES News Special.

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