• by Paul Gough , June 13, 2003

A deal announced at the National Cable & Telecommunication Association's show last week could presage the near future for interactive television.

Microsoft TV and ESPN announced a partnership that will see the sports-media company initially supply two services for the software giant's new digital TV platform. The new platform, called the Foundation Edition, marks a change from Microsoft TV's previous focus on a new generation of set top boxes that never really caught fire. The Foundation Edition will work on set top boxes that are among the most popular in digital-cable households, and helping cable companies that have put millions upon millions of dollars into infrastructure upgrades to get revenue out of their investment.

Two ESPN services, ESPN Extra and ESPN Today, are the first to use the Microsoft TV Foundation. They were demonstrated at NCTA's National Show last week, although they have yet to go beyond the testing stage with the Microsoft TV platform. ESPN executives say that will happen as MSOs start deploying the system; Comcast has already said it will begin to do that and while nothing else has been announced, other MSOs may follow.

For ESPN, it's an effort in emerging technology that helped found the company as an ultimately very successful cable channel in 1979, made a commitment to the Internet with espn.com in 1995 and the recent introduction of ESPN Motion to take advantage of the consumers' move to broadband.

The two ESPN services available by Microsoft TV will be an overlay application that works a lot like what has come to be known as traditional interactive television and another service, ESPN Today, which has been available since 2001. The first, ESPN Extra, displays an opportunity to get more information - scores, headlines, even ad messages - while watching ESPN or ESPN2, accessible through the digital remote control.

"It's a fairly simple application. It keeps sports fans informed about things that they want to know about ... without having to go to the computer or espn.com," said Manish Jha, ESPN's senior vice president and general manager of emerging media and data. That application's selling point is the convenience and control that can be delivered from the couch.

The second application, ESPN Today, creates a virtual channel similar to ones that are already on other interactive television systems on cable and satellite environments. On that virtual channel is an immersive environment that offers a lot of different types of sports data and video that can be accessed from one location. You'll find scores, video highlights from recent games, some commentary and analysis. There's also the option to see linear channels and purchase ESPN pay-per-view packages for basketball or football.

"It's designed to be a destination," Jha said.

ESPN Today is already in place on Cablevision systems in Long Island, albeit with a Sony platform. The Cablevision service is free but whether future MSOs will offer the services for free or for a charge has yet to be determined. Jha said the advertising opportunities are still to be explored but they include targeting, the opportunity to make advertising relevant to individual viewers, sweepstakes access and other efforts right through the television.

"We could make possible the things that quite frankly haven't been possible through linear television, things that interactive television really make possible," he said.

Jha said that in the past couple of years, some in the industry had gotten ahead of themselves and promised more than the platforms could deliver. "We're being very pragmatic and focusing on the platforms that are here and now and taking one step at a time," he said.