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OpenTV Joins OpenCable Drive

Seeking to boost its presence in the U.S. cable market, OpenTV Corp. will join the OpenCable digital cable standardization drive orchestrated by CableLabs.

OpenTV announced Wednesday that it will play an active role in the OpenCable standards process and license its interactive TV software patents to other participating companies. Although OpenTV has contributed to OpenCable efforts before, the firm will deepen its involvement in the process and fully support the related OCAP interoperable middleware applications for digital TV sets and set-top boxes.

The move came just one day after OpenTV, following years of futility, finally snagged its first major MSO deal in the U.S. On Tuesday, the San Francisco-based firm notched a multiyear licensing pact with Time Warner Cable to place its interactive software on potentially millions of Motorola digital cable set-top boxes.

Financial terms of the deal were not announced. But Kaufman Research analyst Todd Mitchell estimates the deal is worth at least $18 million to $20 million.

"This deal marks a historic milestone for OpenTV and the culmination of many years of work," says OpenTV Chairman and CEO James Chiddix. "Gaining a strong foothold in the U.S. cable market has long been a goal of OpenTV."

While it's been a long time in coming, it's not a huge shock that OpenTV struck its first big U.S. cable deal with Time Warner. That's because Chiddix, a 30-year cable industry veteran, was the long-time CTO of Time Warner before taking over the 10-year-old software firm in April 2004.

Time Warner says it will use the OpenTV Core 2.0 software to enable the MSO's new "Digital Navigator" program guide to run on Motorola boxes. The software, displayed by OpenTV at the National Show in April, will also permit Time Warner to offer interactive games and TV shows, video-on-demand, mosaic channels, and other applications.

In addition, the two companies say the deal will let Time Warner "facilitate cross-platform integrated services and speed to market new product introductions." In other words, the software will allow the MSO to roll out more multimedia and convergence services, such as caller ID on TV and online gaming.

Time Warner, the second largest MSO in North America with 11 million basic cable subscribers, mainly uses set-top boxes from Scientific-Atlanta in its cable systems right now. But, thanks to its pending buyout of Adelphia Communications with Comcast Corp., Time Warner stands to inherit several million new cable customers with Motorola set-tops in their homes.

Plans call for Time Warner to start introducing OpenTV applications on Motorola boxes later this year. The set-tops will range from the widely deployed low-end DCT-2000 models to more advanced digital boxes.

After years of talk, cable operators are seriously exploring interactive TV services now because of mounting video competition from both DBS providers and the Baby Bells. Chiddix has said OpenTV, which supplies its software to satellite TV provider EchoStar Communications, is also negotiating a licensing deal with Comcast Corp.

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