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WebTV to launch long-awaited audio, video upgrades

Microsoft is upgrading its set-top box service to include long-awaited support for streaming audio and video and a variety of other Web technologies.

    Microsoft is upgrading its WebTV service to include long-awaited support for streaming audio and video and a variety of other Web technologies.

    The upgrades, some of which were announced as long as a year ago, mark a victory for WebTV customers who have demanded support for RealNetworks' latest media player and other third-party Web technologies, including Java.

    As part of today's system-wide upgrade, WebTV will make the Microsoft Windows Media Player and RealNetworks G2 media player available through its service, the company announced. The products play streaming audio and video, as well as downloaded digital music files, including MP3 files.

    In addition, Microsoft will offer a version of its MSN Messenger service, improved JavaScript support, and compatibility with new printers.

    Microsoft representatives could not be reached for comment.

    WebTV, which provides Internet service to subscribers through a TV set-top box, was acquired by Microsoft in 1997. Although WebTV was the first to offer Internet access via the TV set, it has struggled to find its identity as larger companies, including parent company Microsoft, have developed digital set-top boxes with a wide array of features, including broadband high-speed Internet access.

    The company has repositioned itself as a provider of Web-enhanced television, rather than as the scaled-down Internet service it debuted as. It also has focused on developing devices with features such as digital video recording capabilities.

    In recent months, WebTV looked to be experimenting with ways to boost its subscriber numbers and revenues, inserting ad banners into email pages, marketing its product directly, and offering two free months of service to new subscribers. WebTV has about 1 million customers.

    The service has been hit by criticism from some subscribers for its lack of support for certain standard Web technologies, including Java and the G2 media player, which competes directly with Windows Media Player. Such complaints led some to question whether the service's technology choices were being dictated by its parent company's competitive concerns.

    In the past year, the company has promised that support for the RealNetworks G2 player would be part of its next upgrade. Previously, WebTV said that the low-cost set-top box's technical limitations made it difficult to include all of the features customers were requesting.

    In recent months, Microsoft has aggressively promoted its own streaming media player, leading some analysts to question whether RealNetworks might eventually be steamrolled by the software giant. Swimming with sharks

    WebTV will start the upgrade today, the company said, but will stagger the software release based on the type of device.

    In addition to WebTV, Microsoft has experimented with a variety of devices, some with wireless Internet access. These non-PC appliances and devices are expected to saturate the market in the next few years, which explains why technology companies are angling for their cuts of future revenues.

    Overall, the market for devices, including set-top boxes, handheld computers and gaming consoles, is expected to grow from 11 million units shipped in 1999 to 89 million units in 2004. The market will grow from revenues of $2.4 billion last year to $17.8 billion in 2004, according to research firm International Data Corp.