The days of the traditional television set are numbered, according to Bill Gates. The Microsoft chairman said, while announcing a deal with BSkyB the British Satellite Broadcaster.
BSkyB has forged a deal with Microsoft allowing it to launch a video-on-demand service for personal computers, extending its push into broadband and giving millions of its subscriber’s access to films and sports highlights on a new format.
Speaking at the Consumer Electronics Show in Las Vegas, Mr. Gates said the tie-up with Sky, which is 37.2 per cent owned by News Corporation, parent company of Times Online, heralded the arrival of the much-trailed "digital lifestyle".
The deal will make Sky content available to subscribers via Microsoft’s Media Centre Software soon. The so called "on-demand" technology will allow viewers to watch what they want when they want it.
The service will be available to BSkyB’s premium movies and sports subscribers.
It has long been suggested that high-speed broadband internet connections will become the main conduit for television, music and telecoms services.
The development came as it emerged that Google is planning a push into the paid-for videos market with the launch of a service that will allow internet users to search for and buy videos through its site.
The US internet giant is understood already to have signed up content partners, including CBS, the American Broadcaster, and the National Basketball Association. The new service would make use of Google’s core search technology to find video content. It would then allow users to pay for the content and download it to their computers.
Google, like the rival Yahoo!, already offers a video search service using an archive it has built up of TV programmes, educational videos and personal productions. This will be the first time that users can pay for premium content.
"Sky by broadband" will include "hundreds of movies to download and hundreds of sports clips to stream", Microsoft said in a statement. Content from MTV, the American music channel, will also be made available through a similar partnership.
Windows and the consumer electronics industry are changing dramatically. People live in a world with more digital content and information than ever before, Mr. Gates said.
Microsoft’s Windows operating system, on which its Media tools are built, has a massive reach. Industry estimates suggest 90 per cent of computers run on it.
Mr. Gates said: We are working with BSkyB … and they will be setting up through our alliance a video on-demand capability … they have got over 8 million subscribers in the UK who will be able to do those downloads.
Mr. Gates also announced plans for an external high-definition DVD drive for its Xbox 360 device, which Microsoft is promoting as a home entertainment system as well as a games console.
Microsoft has fiercely promoted its Media software over the years, a strategy which has led it into several high-profile legal wrangles. Its decision to promote its Windows Media Player by effectively giving it away for free led to charges that it was engaging in anti-competitive practices.
The European Union recently threatened the company with fines of £1.4 million a day for refusing to meet measures designed to help other companies compete.
As Britain’s take-up of high-speed broadband internet connections has increased, media and telecoms groups are preparing for the internet to become the main source for television, music and telecoms services. Video-on-demand technology will allow viewers to watch what they want when they want.
The recently announced partnership also underscores Sky’s determination to move online. In October, the company announced a £211 million takeover of Easynet, the broadband telecoms specialist. That deal will allow BSkyB to offer "triple-play" services–a combination of broadband, television and telephony – pitching it against BT as well as the newly-merged cable companies NTL and Telewest.
BSkyB chief executive James Murdoch said the Easynet deal reflected the exciting opportunities that now exist to combine quality entertainment with significant high-speed connections. Sky has said that nearly half of its satellite TV customers have broadband access and most of these will be reviewing their internet service provider over the next few years.
Mr. Gates also confirmed a similar partnership with the satellite company’s American sister service, DirecTV, also part of News Corporation. This will see video from the service streamed directly to Windows Media Centre PCs.
The announcement reiterates BSkyB’s interest in expanding its broadband offering. BSkyB has said that nearly half its satellite TV customers have broadband access. This will help the group to compete with NTL and Telewest, currently in the process of merging, which both offer triple play.