Microsoft looks to bring MSN TV box to foreign markets

After its U.S. launch last October, Microsoft is working to bring its MSN TV 2 product to international markets.

Microsoft plans to bring its MSN TV 2 product to an international market in the next few years, buoyed by what it sees as the successful U.S. launch of the service last October.

MSN TV 2 is the latest incarnation of the former WebTV product. It allows users to access MSN's online services and the Internet through a television using a dial-up or broadband Internet connection. It is a silver box measuring 11.8 inches (30 centimeters) wide by 9 inches (23 centimeters) deep by 2.4 inches (6.1 centimeters) tall that runs Windows CE.

MSN TV can quickly be customised for foreign markets, according to Sam Klepper, general manager for MSN TV. He hopes to have the product available in some international markets within three years, he said in an interview at Microsoft's Mountain View, California, campus on Friday.

Microsoft is currently drawing up plans for the product's expansion: Canadian and Mexican ISPs (Internet service providers) have shown interest in the product, and Microsoft is also eying Puerto Rico and some European countries, Klepper said. Additionally, some partners in India have shown a curiosity about the service, according to one source.

Microsoft won't give sales figures for MSN TV 2 in the U.S. but Klepper said he is happy with its rate of adoption. While Microsoft sells the boxes in the U.S. through retail stores and its Web site, plans for the international expansion call for co-selling with ISPs and network operators, Klepper said. "Microsoft and MSN have partnerships with operators around the world. It is a more efficient way to get market share," he said.

For the Canadian market, Microsoft is in discussions with Bell Canada on how MSN TV 2 could benefit Bell Canada's broadband customers, Klepper said. For Mexico, Microsoft is in talks with an unnamed ISP that has expressed enthusiasm in the product as a way to introduce customers to broadband Internet services, he said.

WebTV and the first MSN TV box were designed to bring Internet access to users who did not own PCs, including senior citizens. With MSN TV 2, Microsoft hopes to expand the market by including broadband and home networking capabilities. The product includes digital media receiver features that let users access content stored on a PC on their TV.

Microsoft acquired WebTV Networks in 1997. It operated as an independent, wholly-owned Microsoft subsidiary until 2001, when it was folded into Microsoft's MSN division and the product renamed MSN TV, according to Klepper.

In the U.S., an MSN TV 2 package including the box, a wireless keyboard and remote control is priced at US$199.95. Additionally, broadband customers pay US$9.95 a month or US$99.95 a year, excluding the broadband connection. The dial-up subscription fee is US$21.95 a month, according to Microsoft.

The box has a phone jack for a dial up Internet connection, as well as an Ethernet jack and USB (universal serial bus) ports that can be used for wireless network adapters. Currently, Thomson of France is the only manufacturer of the MSN TV 2 box.

Microsoft plans to update MSN TV 2 around the middle of the year. The update will add Movielink's service, allowing users to order and watch movies. It will also let users play songs stored on their PC that are protected with Microsoft's digital rights management technology, Klepper said.

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Joris Evers

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