Bloomberg to do interactive TV

Starting next week, news junkies will be able to click on their PCs for Bloomberg television coverage.

Fresh from a revamp of its Web site, Bloomberg will begin Internet transmission of interactive television programming next week. The streaming video transmission will be viewable with either the Microsoft NetShow player or the RealNetworks RealPlayer client. The interface will be Java-based, and the service will be hosted by Concentric Network, as reported earlier.

To be interactive, the service will allow users to click on various options, including financial, sports, entertainment, technology, market, and weather news.

The Bloomberg TV service is already distributed to more than 100 million households on cable networks, USA Network, DirecTV, and through the Bloomberg terminal service, which also delivers the company's bread-and-butter news wire service right to the desktop.

When the system goes live next week, Concentric is ready to handle 2,000 concurrent streams at once, according to vice president of marketing Mark Fisher. Because the service is free to all who visit the Bloomberg site, demand for the service could increase rapidly. The Concentric system, which uses a bandwidth management service called Packeteer, is scalable enough to accommodate heavier traffic, Fisher said.

Concentric will be receiving digitized video from Bloomberg and readying it for streaming, so the live content will be on a slight time delay, Fisher said. Because the service's interface includes Java, a Java-enabled browser is necessary for viewing.

Interviewed at his office last month, company chief executive Michael Bloomberg waved off the idea that interactive TV could make a profit anytime soon.

"It's not on the radar screen," said Bloomberg. "I hope it will be big someday, but when you put a seed in the ground, you don't pay too much attention to the soil."

Whether it becomes profitable or not, he sees the nature of his TV service changing: "As bandwidth goes up--and it will get there--I don't see why you wouldn't want TV on demand."

He also acknowledged that video would be a staple of Internet content in the future, when a "big percentage of what people download will have some moving pictures."

The company now makes 98 percent of its revenues and "120 percent of the profits" from subscriptions to the terminal service, according to Bloomberg. The company has installed more than 75,000 terminals to date. Most of the delivery is over dedicated phone lines, but Bloomberg sees more and more of it shifting to the Internet. Currently, 8,000 of his customers dial in over the Internet, and that number will rise this year as the company has begun to ask users in hard-to-reach countries to switch.

Under the existing system, the company maintains private lines and local telephone hubs in multiple locations. Subscribers pay only for the cost of dialing in to the local site. Bloomberg would like to migrate as many customers as possible onto the Internet, saving himself as much as $70 million per year in long distance charges.

"Why not shift that cost over to the customers?" he asked, arguing that the increase wouldn't be an obstacle. Considering that the company's long distance charges remained at $70 million from the previous year, Bloomberg figures low dial-in costs through corporate-focused ISPs would continue to keep those prices stable.