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Firms team for PC-TV

Silicon Valley start-up Geocast expands the reach of planned "datacasting" services via digital television signals through a new deal with the Belo group of TV stations, while new competitors wait in the wings with deals of their own.

Silicon Valley start-up Geocast aims to expand the reach of planned "datacasting" services via digital television signals through a new deal with the Belo group of TV stations, while new competitors wait in the wings with deals of their own.

Geocast is working on a multimegabit wireless data service that transmits software, video, and information services to PCs via airwaves reserved for the transmission of digital television (DTV).

Through the new alliance with the Belo group's 17 TV stations as well as a previously announced alliance with broadcaster Hearst-Argyle, Geocast's service will be available to 30 million homes when it launches next year, the company said.

The free Geocast service works by sending signals to a device--to be priced at 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.

Belo has agreed to market the service and offer content from its TV and newspaper properties. Geocast said Belo will invest in the company, and in return it will share in revenue streams--mostly from advertising, at first--associated with its content.

The amount of the investment was not disclosed. Belo could not be reached for further comment.

Competition for cable modem service providers?
If consumers take to the device, which lets them download high-quality video and other data at speeds ranging up to 7 megabits per second--a far cry from the 56 kilobytes per second for dial-up modems--Geocast and others of its kind could quickly become competitors to cable modem service providers like Excite@Home and digital subscriber line (DSL) service providers. The datacasting won't require rewiring neighborhoods or sending technicians out to install modem equipment, factors that have slowed the adoption of other broadband services. The broadcasters will need to install equipment and software in their transmission facilities to send data out, but there's plenty of incentive for them.

"Broadcasters are truly in a dilemma. They are desperately looking for an alternative to HDTV [high definition digital television]," said Craig Thueson, vice president of business development, WaveExpress, a competitor to Geocast that is planning on offering datacasting services.

The networks are required by the Federal Communications Commission to begin digital broadcasts in the top 30 markets by November 1999, but the high cost of the new sets has limited sales, despite the better picture and sound quality HDTV sets offer.

Also, local and network broadcasters haven't been producing very much content for the sets because of the cost of new equipment and converting film libraries to the new HDTV formats.

Because demand for high-speed Internet connections among PC users is growing fast, broadcasters stand a better chance of making money from datacasting than HDTV in the near term.

WaveExpress transitioning to DTV
WaveExpress, a joint venture between Sarnoff, a TV pioneer that helped develop digital TV standards, Fantastic Corporation, and Wave Systems, is getting ready to show broadcasters how they will be able to make money off the transition to digital television. See related story.

WaveExpress will offer the first demonstration of its datacasting product at the upcoming Comdex trade show in Las Vegas. The system works by sending data to a DTV receiver card in the PC, but a standalone device similar to Geocast's device is also in the works.

"What we're really building in concert with broadcasters is a relationship with a consumer," said Thueson. Broadcasters, who are now dependent on advertising revenue, will be able to participate in ongoing revenue streams from a variety of new sources, he said.

For instance, WaveExpress will demonstrate at Comdex a music channel that downloads albums to a PC for a monthly subscription fee, said Thueson. In addition to e-commerce opportunities such as game downloads, broadcasters could get into the pay-per-view business, offering concerts to viewers.