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.Sunday , Sep 17, 2000 Sun-Thu at 18:00 (GMT+3)
High Tech Features

"I Don`t Believe in Internet on TV"
By Efi Landau


While sitting over coffee with me, NDS president Abe Peled complained that his company`s foreign status has caused a lack of coverage of its share in Israel, even though the company has 300 development personnel on Har Hotzvin in Jerusalem, and he himself is an Israeli citizen dividing his time between here and there (there being Britain and the US). NDS is part of Australian communications tycoon Rupert Murdoch`s powerful News Corporation group.

It seemed as if Peled was addressing his gripe not just to me, but also to his public relations personnel, and that is the origin of the NDS publicity epidemic. The conversation with Peled will therefore deal not with the past, and very little with the present. What interests me is the company`s future and the future market combining communications with interactive TV and the Internet. Here, in this triangle, the world`s largest field, Abe Peled has some surprising things to say.

NDS is defined as a leading company. Unlike most high tech companies, however, its leadership is not an empty expression in its press releases. NDS`s record speaks for itself.

"Globes": What do you lead in?

Peled: "Leadership is determined by the digital market. At the end of the Murdoch group`s third quarter on March 31, there were 16.8 NDS user-subscribers. At the end of June we had 18 million, which is 47% of the global digital market. There were 26 million digital subscribers in the world at the end of 1999, of which 23 million subscribed to satellite and three million to cable."

Are you mostly on satellite?

"Most of our subscribers are on satellite, but we have begun working with cable, too."

Define what you do in a single sentence.

"We distribute information and content for TV and computers on both a digital and a broadband Internet basis."

Broadband is a popular, almost fashionable concept.

"I believe that the combination of digital broadcasting with Internet on demand is the right solution. We have launched a new product called Sinamedia, which is designed to base TV and broadband Internet on an ADSL and cable modems, for either computers or TV."

That, however, is not all. The future lies in the company`s second business focus - interactive TV applications. Peled lists three main reasons for digital TV:


A larger, more convenient user selection, mostly in the number of channels. Peled: "Selection is the ABC of digital TV."
What will the next generation consist of?

"The next generation of home converters will have more memory capacity. NDS has a technology called XTV, which is conversion software that exploits the memory storage capacity. The company is about to launch a new product in cooperation with Korean converter box manufacturer Pace Micro Technology. The product will have a 20-gigabyte hard disk capable of storing 20-30 hours of programs. You won`t need a VCR to record."


The added dimension of interactive TV programs. Peled: "You participate. For example, in a soccer game, you chose the photography angle you want to view. You can ask to follow a certain player all the time, watch a replay at any time, see the game highlights, and whatever statistics you want - for the team, for a player, a particular league, or all together."
An interactive channel like this is already being operated by Sky Sports in Britain. Peled says that half of the viewers are choosing it. It is considered a huge success.


Bringing the viewer the most popular Internet sites. Peled: "I don`t believe in bringing the Internet to television, but all sorts of Internet services of interest to TV viewers have been developed. The application we have developed does not bring the site to TV, but the relevant information from the site."
It sounds like you are not a great believer in the Internet.

"Television is not the proper place for Internet surfing. I`ll give you four reasons. First of all, a TV set has only between a fourth and an eighth of the resolution presented by a PC screen. A PC has 1.8 resolution, while a TV has 0.5. A digital converter does not alter the situation. Digital TV networks utilizing HDTV technology will change this, but this is expensive and still very far in the future.

"The second reason is that you sit 3-4 meters from the TV screen, so the text has to be enlarged in order to be seen. The quantity of information you can present is therefore about one sixteenth of what can be shown on a PC screen. In order to view one computer screen with the WebTV service, following automatic translation, you have to scroll almost ten pages.

"The third reason is that the PC`s computing power and storage capacity will always be larger than with a TV. With an advanced digital converter, you can store eight gigabytes, and a Pentium 3 has ten times the computing capacity.

"The fourth reason is sociological. I`m no expert, but the Internet is an individual experience, more suitable for a PC. Television is simply something else."

How does the interactive TV market look now?

"WebTV came out in 1997 in the US with an Internet surfing device over TV. Then News Corporation asked me if it was worthwhile to buy the company for $400 million, and I said no. They give me a good mark for that. Microsoft bought the company for $400 million. Today there are 400,000 devices. Microsoft changed the strategy from surfing to offering relevant information. America Online has now come out with AOLTV. Walt Mossberg of "The Wall Street Journal" wrote, "It`s not for prime time". He said it was good for chat forums."

Liberate Technologies recently acquired Israeli company MoreCom in order to provide interactive television. Was that a mistake?

"They`re going with it. My position on this is fairly extreme. I believe that Internet standards will reach TV. The information and services will make it, but it won`t be another device for Internet surfing."

How do you handle broadband content?

"Our new product, Sinamedia, downloads various content packets simultaneously to servers at the broadcast station by satellite at 8-16 Mbps. Several channels can be downloaded simultaneously. The station`s main server has a product that packages the content from various sources, including video and Internet content. We distribute simultaneously on a very wide bandwidth to all. Local content providers can transmit on broadband to a central server."

Are you talking about a system that already works?

"No. It`s just beginning. We are now conducting trials on the system."

Is Rupert Murdoch involved in the company`s routine business?

"He is general manager of News Corporation and regards NDS as a strategic asset. I am also on the News Corporation 16-person advisory panel, which is the company`s senior management."

You have announced a reorganization.

"We are uniting all Murdoch`s satellite platforms into one company. NDS will be in this group."

What is your vision?

"The field is still in diapers. The number of digital TV viewers is expected to rise from 26 million to 260 million in another five years. We are the world leaders; we have a lot more to accomplish."

Published by Israel`s Business Arena on September 14, 2000
 
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