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Echostar, WebTV team on TV service

EchoStar's Dishplayer will be one of the first of a new breed of convergence devices to come down the pike, offering interactivity and Net access.

Echostar Communications and Microsoft's WebTV Networks will launch an interactive television service next month, becoming one of the first high-speed Internet set-top boxes to hit stores, though it will lack many of the fancy features expected in broadband systems.

EchoStar and WebTV's iteration will hit "satellite specialty stores" and See special report: When worlds collide general retailers like Sears, CostCo, and Sam's Club next month for $499, and will include set-top box, remote control, and wireless keyboard, according to Judianne Atencio, a spokesperson for EchoStar.

Customers will need to sign up with EchoStar's $19.95 per month satellite television service and WebTV's $24.95 per month Internet service subscription, Atencio said.

The combined services, though billed separately, will be complementary.For example: "You can watch [the TV show] Friends and then email to your friends comments about what the characters are wearing, at the same time," she said.

EchoStar's Dishplayer will be one of the first of a new breed of convergence devices to come down the pike, but by no means will it be the last. Cable service providers, consumer electronics firms, networking companies, and PC makers are all jumping on the bandwagon, lured by the promises of providing lucrative home networking and fast Internet services to the home.

Hardware-wise, the Dishplayer, manufactured by SCI, features two smart-card slots, 16MB of memory, an 8.6GB hard drive, and a 56-kbps modem for "upstream" communications. Although Dishplayer receives Internet data through the faster satellite connection, the dial-up connection for upstream is much slower than broadband set-top boxes deployed by cable providers and does not offer the same level of interactivity, said Michael Harris, an analyst with Kinetic Strategies.

"It's pretty cool--an interesting combination. [However]I don't think either company is betting the farm on it," said Kevin Hause, an analyst with International Data Corporation.

Dishplayer is important because "it's a prelude of things to come, both from the companies together as well as interactive satellite in general. As you start to look at high-speed communications, this is going to be the first true roll-out of products that enable it," he said.

Harris said Dishplayer's near-PC hard drive and memory will be used to simulate broadband connectivity. "It's intended to imitate a true broadband experience, but most interactive television customers will prefer the real thing."

"It's not a two-way cable set-top box. It's not a true broadband experience," he said.

The hard drive can be used to store up to 30 minutes of video--not enough room for an entire movie, although EchoStar's Atencio says the service is coming. "This will eventually replace the VCR," she said.

Video-on-demand will likely be a standard feature among set-top boxes set to be rolled out in the next eight months from companies like General Instrument and Scientific Atlanta, Harris said.

In addition, the new box is priced much higher than current WebTV offerings. WebTV Classic and Plus boxes are currently priced at $99, and $199 respectively, aggressively targeting non-PC buyers and much lower in price than the $499 Dishplayer. In fact, Dishplayer is likely pricing itself out of the mass consumer market and may only appeal to those already planning a satellite purchase, Harris said.

"It would have been more compelling if the service was better bundled, with discounted pricing," he said, noting that Echostar may try to entice existing subscribers to upgrade. "I was hoping for something more elegant [from the partnership]."

The WebTV service offered with Dishplayer will allow up to six email addresses, parental filtering, discussion groups, some personalization, TV listings, and games, according to the WebTV Web site.

WebTV could not be reached for comment. It is unclear whether the satellite service of WebTV will include support for later versions of RealAudio streaming technology or Java, two Web technologies not yet supported in WebTV Classic or WebTV Plus boxes.

In other PC-TV news, Replay Networks rolled out its ReplayTV set-top device today. The ReplayTV set-top computer is a recording device that acts like a souped-up VCR. It lets users pause, rewind, and play back television programs, and it also seeks out programs that the viewer might want. (See related story)

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