E-commerce on DTV

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Describe the system you're offering to the broadcasters and compare it with that of other datacasting firms.

The company's relying on the fact that the Internet, with its bandwidth constrictions, and the digital broadcasting universe, with its essentially unlimited bandwidth, will converge into a new set of opportunities. What we provide is a security environment. If you're in the content business and you have intellectual property that has value, rather than using the traditional broadcast model, which is [to have] really rich content and charge advertisers to show it, there's sort of a hybrid opportunity to provide distribution of that material on a pay-per-view, pay-per-license basis. In addition to that, we've got a whole set of infrastructure-type technology that we can provide broadcasters.

You get a look and feel like it's home page, but there are virtually no constrictions on what you can do with the bandwidth. Some of that will be interactive, because there is a backchannel capability.

Who are your existing technology partners, and whom do you need to work with to provide that capability to PC users?

The idea is to feed off the body parts that exist today in the PC industry, not to create proprietary boxes, which is the biggest difference between us and the closest competitor that we have, in my view, which is Geocast. We don't have boxes. We have a personal computer, a tuner card, and basically that's it. You obviously need an antenna, too, to capture the digital signal. On top of that we provide all of the integration for the client [the PC] and, from the broadcaster's point of view, the backroom hardware and software to actually create the transmission.

What card suppliers are you working with?

We're working with Pinnacle, Creative and Hauppauge. LG [Electronics, which has formed a datacasting firm called Triveni Digital], although it has not announced its intent to be in the consumer business, is providing tuning capability in our test environments.

What testing have you done so far?

The initial alpha testing was with wnjn in New Jersey, the public broadcaster. They already had an existing relationship with Sarnoff, which is our R & D arm for digital television, so we were able to use a GE satellite, transmit at 2 Mb/s up to the satellite, and receive down through the LG [Electronics] tuner card at the local station. We included some of their local content such as news, weather and sports. We added other data types, such as raw data and other pictures, to basically prove that the technology works.

Another technology partner [that participated] is Fantastic Corp..We have exclusive North American rights to the Fantastic license.

What does Fantastic do?

Once the media exists, it's got to be tagged for transmission, and it's got to be scheduled into the 19.4-Mb/s stream, so there's a graphical user interface that makes it very easy for the broadcaster to do that. Fantastic has a CMC [Channel Management Center] product, which is their server product, and CEC [Channel Editorial Center] product, which is their client product, and we sell a combination of both of those. That sits today on top of an HP server, and we willsell the infrastructure product to the broadcaster. That's what we're doing now with our rollout with Capitol Broadcasting and DTV Plus in Raleigh, N.C. That very quickly will be followed up with a second effort in Baltimore with Sinclair and then a third effort in Cincinnati with Clear Channel, both probably in the next six weeks. We will work with public broadcasters in Washington and Oregon.

How does the revenue stream get back to the broadcaster?

As part of the process, on the front end, we tag all the information. So we know who the creator was, what the transmission method was, where it went, how big the information is. Once it comes back through the process, it's encrypted to the point where it gets in the personal computer, and that's where the intellectual property exists with Wave Systems. Once it's requested, there's a variety of different ways that the transactions could occur.

Think of it as an EZ-Pass. I can come through and just play for 30 seconds, I can buy a license to an MP3 song. The artist can determine whether I can play it once for a fee or have to buy a license, whether I want to play just one song or the entire album. Once that occurs, then there's going to be a revenue share, because we've got a backend contract-management system, [which] can keep track of all of that.