Microsoft turns on to interactive TV

Microsoft has teamed up with Intertainer to offer consumers interactive entertainment on demand.

The software giant is determined to take a leading role in the enhanced television services market.

The deal will speed the introduction of Intertainer's home entertainment service, which offers users pay-per-view films, music, electronic shopping to PCs connected to cable modems, high-speed digital telephone lines or television sets with digital set-top boxes. The service is available in some US cities, but so far has fewer than 1,000 subscribers.

As part of the deal, Intertainer will become the preferred broadband content service for Microsoft, and will be offered as a service to network operators licensing the Microsoft TV plaform software which uses MS Windows Media technologies to deliver video through PCs and TVs.

Microsoft has taken a minority stake in Intertainer. The terms of the investment were not disclosed.

This not the first time Microsoft has bought into the interactive TV market. The Redmond giant agreed to invest $5 billion in AT&T in exchange for a promise that the telco, which owns the cable systems of the former Tele-Communications, would use Microsoft software in 7.5 million to 10 million digital set-top cable boxes.

Microsoft also bought an 11 per cent stake in Web TV specialist Comcast Corporation.