Geocast gets support for "datacasting" network

The aggressive young firm is trying to develop a network for customized content that is delivered to the PC via digital TV broadcast signals. Toward that end, Geocast said Thomson will build and sell a receiver, marketed under the RCA brand name, that allows consumers to receive software, video and information services on their PCs via airwaves reserved for the transmission of digital television (DTV).

Liberty Media, the programming unit of AT&T, will apparently help Geocast add a wide array of content to its service. Liberty will act as a conduit for building relationships with networks such as Discovery Channel, QVC and Encore, all of which Liberty has investments in.

Liberty Media and Thomson Multimedia each staked the firm for $15 million. Separately, game developer Electronic Arts extended a previously announced relationship and will now be making an investment in Geocast as well.

The latest moves should help to maintain visibility for the start-up, whose products have not yet materialized in a market that has yet to form. By adding Thomson and Liberty to a roster of big-name investors that already includes three of Silicon Valley's best-known venture capital firms and two of the largest broadcast firms in the United States, the company is rapidly becoming the company to watch in this space.

Broadcasters have been losing viewers to the Internet at the same time they are having to upgrade their stations to send out DTV signals, despite the fact that there are few digital televisions in U.S. homes. The free Geocast service works by sending data at multimegabit speeds to a device--which the company hopes to price under $300--that can receive and store information on its own hard disk drive. A regular Internet connection is still needed to send information, such as a request to purchase something, from a PC to the Internet, but users can download information at between 7 and 9 megabits per second, compared to 53 kilobits per second for a dial-up modem.

Because demand for high-speed Internet connections among PC users is growing faster than supply, broadcasters stand a better chance of making money from DTV by "datacasting" than by sending out only expensive high-definition DTV content. Already, Geocast said its agreements with broadcasters mean its service can potentially reach more than 30 million homes, or nearly a third of all U.S. households.

WaveXpress--a joint venture of Sarnoff, a TV pioneer that helped develop digital TV standards, Fantastic Corporation and Wave Systems--is also working on a service similar to Geocast's. The company has yet to announce partnerships with broadcasters, however.

Geocast stands to capture a large number of consumers who want high-speed Net service but can't receive or afford digital subscriber line (DSL) or cable modem service. Given the reception that companies like Excite@Home, Covad and Rhythms NetConnections have had on Wall Street, Thomson, Liberty and others may be hoping that a Geocast public offering could be similarly well liked.

Thomson Multimedia vice president James E. Meyer, Liberty Media chief executive officer Robert R. Bennett and Worldwide Studios for Electronic Arts president Don Mattrick will join the Geocast board, the company said.