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TECHNOLOGY : AT&T, IBM Unveil Interactive TV Systems : Communications: The firms hope to grab share of emerging dial-up entertainment market. Video store industry is skeptical.

June 02, 1993|From Times Staff and Wire Reports

The nation's two largest high-technology companies, American Telephone & Telegraph and International Business Machines, this week are unveiling rival systems to capture a piece of the emerging market for televised, viewer-controlled entertainment and information services.

Dubbed "interactive television," the programming will allow viewers to select movies, pay bills, shop, play games and browse through electronic libraries using a hand-held remote control device.

AT&T publicly unveiled its system Tuesday and is scheduled to announce today that Viacom International, a cable TV operator and owner of the MTV and Nickelodeon cable channels, will test the technology with its customers in the San Francisco suburb of Castro Valley. As reported in The Times last month, BellSouth is also set to conduct a test of the technology with some of its customers.

The IBM system, under development with ICTV, a software and hardware manufacturer, and New Century Communications, a software publisher, is set for unveiling at the national cable television trade show in San Francisco next week.

Both systems are designed to be used either by cable operators or telephone companies as they seek to expand their telecommunications services to include a broad new range of dial-up entertainment and information for their customers.

Both AT&T and IBM said their systems would allow viewers to pick out a movie, watch it immediately and have the capacity to pause, rewind or fast-forward their selection.

Maureen Grzelakowski, director of Switching Systems Business Management at AT&T Network Systems, said the arrangement would be similar to having a video store available "in your home 24 hours a day."

David Serlin, executive vice president of ICTV, promised the product would be superior to rival offerings because the brains for the equipment would be in a centralized location while "everyone else puts the intelligence in the box that sits in the home."

The video-store industry greeted the announcement with skepticism.

Wally Knief, of Blockbuster Video, the largest video-store chain, said movie studios now provide new offerings to video stores 30 to 60 days in advance of pay-per-view "because we return more money." Hollywood, he suggested, "is not going to cut its throat" by giving up its business with video stores.

In a separate announcement, AT&T said Tuesday that it has become the majority owner of EO Inc., a small Silicon Valley company set to introduce later this week a hand-held device that combines the features of a personal computer, cellular telephone, pager and fax machine.

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