America Online (AOL) is locking horns with Microsoft in the US interactive TV arena as it begins to roll out AOLTV to eight regional cities.
However, AOL admits that it will not see revenue from the service until 2003 and analysts are unsure whether US consumers really want interactive TV.
Josh Bernoff, an analyst with Forrester Research, said that Microsoft's WebTV had attracted only 1.1 million users and growth was slow. "AOL needs more than a brand and chat to do well," he said.
But AOL insisted AOLTV differs from WebTV because it isn't trying to turn the television into a PC. Instead it aims to augment the TV experience with interactive features, said chief operating officer, Bob Pittman.
Subscribers to AOLTV are required to purchase Philips' TV set-top box and a wireless keyboard or universal remote control for around $250. The subscription fee is $15 for AOL's existing customers and $25 for new subscribers. The service includes email, instant messaging, chat and a programme guide.
Other features include AOL's You've Got Pictures service, which allows subscribers to organise and view photographs on their television screens, 11 AOL channels with online interactive content to complements the television programming, plus access to the internet while watching TV with picture-in-picture viewing.
Among the TV networks developing content for AOLTV is E! Entertainment Television, the women-oriented Oxygen Media, The Weather Channel, children's specialist Sesame Workshop, and Court TV.
AOL, which is in the midst of acquiring Time Warner is expected to include the US media giant's content in AOLTV. Time Warner owns CNN and publications Time and Fortune.
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