WebTV needs more than Snapple to reach a mass audience

Buy a bottle of Snapple today and you cannot help but see an ad for Internet TV startup WebTV Networks Inc. claiming its service is "surfin' made simple."

Yet, the Palo Alto, Calif., company has a long road to get to the quarter million subscribers forecasted by the company by year's end. It has some 120,000 subscribers currently. The major barrier: mainstream consumers who fail to see the value in having the Internet on their TV.

"Some people are excited about WebTV instantly," said Dave Patchen, marketing manager for WebTV. "Others are not sure what the Internet is about. We need to be really clear about the benefits about the Internet."

To do that, the company has been pushing the Web as a complement to TV. In May, WebTV teamed up with Showtime to sponsor the Tyson-Holyfield fight online. During the broadcast, viewers could vote on the outcome of the fight. Despite Tyson's ear-rending loss, the WebTV-Showtime double-team was a victory with the viewers, according to the company, recently acquired by Microsoft Corp. And the company hints that it will announce a major marketing push for the Christmas season by the end of the month.

But analysts say that aside from such occasional wins, WebTV has not produced compelling partners in online content. "Frankly, WebTV hasn't done as good a job in selling its content to the consumer," said Ross Rubin, group director for Internet research firm Jupiter Communications. "The challenge for them is that the Web's value depends on who is using it."

Jupiter predicts that -- aside from computers -- over 14.7 million Internet-connected devices will be in use by the year 2002, mainly WebTV-like set-top boxes and phones with screens. Yet, Rubin believes most of this growth will come late. "These products are slow to gain acceptance," he said.

For WebTV, this means a long battle. The quirkiness of the market has become familiar territory -- its customers are hard to classify. While many are using the company's service to send E-mail to friends and family already online, others are just curious about the Web. "The pervasiveness of the WWW web address on ads and in television shows has piqued viewers' curiosity," said WebTV's Patchen.

In the end, a strong satisfaction rate -- over 95 percent according to WebTV and Philips surveys -- and Microsoft backing gives the company the best chance of all contenders to make it into the limelight.