NBC, Microsoft Launch Interactive News Service

Television has dreamed of this for decades: A new product pops up on the TV screen and thousands of viewers order it immediately using the buttons on their remote control. The same procedure allows users to order a movie for a small fee or browse newspapers right there on the set.

It's called interactive TV. But so far, despite countless marketing trials and technological information, the experiments have fizzled. Today, NBC and Microsoft Corp. hope to change all that with an interactive news service that, one day, could transform the way people watch television.

The demand for such an innovation is huge, says Paul Saffo, director of the Institute for the Future in Menlo Park, Calif., because Americans increasingly want news as instant as television but as deep and selectable as a news magazine. "Those two desires - I want it now and I want more - those are ... going to fuel this medium," he says. "If Microsoft and NBC do it right, they will be successful."

Today, the two companies launch their $1 billion news venture. Dubbed MSNBC, it is actually two services - a cable-TV news channel and an Internet information service. By building the two services together from the ground up, MSNBC hopes to eventually bridge the gap between the two media and create, eventually, interactive TV.

"The thing about interactive television that has always been a stumbling block, ... is that it has always required some huge innovation in telephones or television" or an additional box on the TV, says Tom Rogers, president of NBC Cable and NBC Interactive. "It always sounded great, but you always needed the consumer to go out and buy something."

MSNBC has a better chance of succeeding, Mr. Rogers argues, because it relies on two gadgets already in many American homes: the TV set and the home computer. Thanks to new technology from the chipmaker Intel, MSNBC will be able to merge these media on a single, TV-equipped personal computer. "You're going to have the true convergence of television and computer in the home," Rogers says.

NBC gets its first big chance to show off the technology with the beginning of the Olympic Games in Atlanta Friday. During more than 70 hours of its coverage, the network will provide extra data about the games for downloading. Thus, with computers using the Intel technology, a user will be able to watch the competition and pull up facts about the athletes at the same time.

Intercast technology used

The technology, called Intercast, accomplishes this by capturing and displaying the unseen part of the TV signal, called the vertical-blanking interval. Already used to provide closed-captions for the hearing impaired, this interval will also carry extra Olympic data as well as links to the Internet. So, if their computers are hooked to the Internet, users will not only be able to download material from the TV signal, they'll also be able send back information, such as their vote for the most-valuable player of America's basketball team, or chat with fans of Olympic cycling.

NBC also plans to use Intercast for one of its detective shows, "Homicide: Life on the Street." Viewers watching the show on properly equipped PCs will be able to access a special "interactive crime lab," where they can comb fingerprint files, coroner's reports, and other data to try to figure out the mystery.

Other players: ESPN and WebTV

NBC will not be alone for long. Several other TV companies, such as Tele-Communications Inc., Turner Broadcasting System, QVC Network, and public-TV station WGBH, are also part of the Intercast consortium and are expected to begin demonstrating the technology next year. CompUSA says it will begin selling an Intercast-equipped Compaq computer in Atlanta for the Olympic Games. AST and Sony plan to offer similar systems in the fall. At least one company, meanwhile, is gearing up to sell Intercast "cards" to retrofit existing high-end Intel-based computers.

But it will take more than the spread of the technology to convert America's more than 60 million cable-TV viewers.

"Frankly, people don't want to work hard when they watch TV," says Scott Woelfel, editor-in-chief of CNN Interactive. He expects it will take years of cultural changes for today's couch potatoes to become Internet surfers.

Still, a crossover audience does exist and it is growing. CNN, an MSNBC competitor that almost cut its own near-$1 billion deal with Microsoft, has launched three Internet services in the past year and has seen traffic grow by more than 200 percent since December. At a time when most on-line ventures still flounder in the red, CNN's service is profitable.

ESPN, the popular cable-sports channel, has found an even bigger on-line audience. By continually promoting its on-line site during broadcasts, ESPN has created the most popular sports site on the Internet. As of April, it had more than 160,000 individual users a day logging in, and that audience is said to be growing by 15 to 20 percent a month.

Both cable services are eagerly looking to merge their services using new technology.

"The lesson of all this stuff is that grand strategy is essential but not sufficient," Mr. Saffo says. "Success lurks in the details of experience."

Meanwhile, a Palo Alto, Calif., company called WebTV is working on making the Internet more TV-like. With licensees Sony and Philips, it's developing a low-cost Internet viewer that plugs into the TV set and will allow users to surf the Internet almost as easily as they channel-surf today. The first products are scheduled to debut this fall.