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Canal Plus Is Armed For ITV Battleground

Think Canal Plus U.S. Technologies is just a middleware company? Think again. The U.S.-based technology offshoot of Canal Plus S.A. plans to deliver big-name content, and perhaps back-office integration, as part of its interactive-TV suite of services for cable operators here.

It's part of the beneficial fallout from Vivendi S.A.'s pending purchase of Universal Studios owner Seagram Co. Ltd., combined with Vivendi's move to increase its ownership stake in parent company Canal Plus.

The only U.S. beachhead for Canal Plus U.S. Technologies is Jacksonville, Fla., where MediaOne Group Inc. (now part of AT & T Broadband) had deployed its "MediaHighway" middleware on Philips Consumer Electronics Co. DVB-compliant digital set-tops. It was the U.S. cable industry's first deployment of an open digital-cable system. But few operators followed suit, leaving Jacksonville's renegade fate hanging in the balance at AT & T, where Microsoft Corp. and Motorola Broadband Communications Sector rule the day.

But Canal Plus has a new wrinkle. Instead of battling OpenTV and others in the smaller middleware space, Canal Plus is singing a louder tune: the delivery of interactive content from Universal's television division, film studio and music group. In addition, Universal owns 47 percent of USA Networks Inc., giving it access to not only more programming, but Ticketmaster Online - CitySearch Inc., Home Shopping Network and other USA assets.

"We can bring [many] interactive pieces to cable operators," says Arthur Orduna, vice president of marketing at Canal Plus U.S.

"What makes us different from the competition is the level of vertical integration we bring," he added. "This is about leveraging assets."

For example, according to Orduna, Universal delivers its themed TV channels internationally, from the studio's film library. It could do the same for U.S. interactive TV, using Canal Plus' Java-based middleware.

Universal Music Group owns 20 major labels, including Motown and Polygram, and boasts a market share close to 40 percent. Selling compact discs via interactive TV is of keen interest to music labels, and the space in which UMG intersects with Canal Plus.

"You need a hardware platform that executes Java," Orduna said.

Vivendi also owns Havas, a publisher of education titles and interactive PC games such asTwitch. Gaming has proven popular with interactive-TV subscribers around the world.

Orduna also says Canal Plus could bring back-end fulfillment capabilities to interactive TV. USA owns Ticketmaster and HSN, which takes orders and ships thousands of packages a day.

"Content has been the missing link in interactive television," Orduna said. Cable operators are still likely to want the final say over the specific content they provide over interactive TV, he acknowledged, but the system-integration job remains monumental and something that most operators would rather not tackle.

"You don't need a content aggregator," he says. "You need a content enabler."

Much of what Canal Plus envisions for the U.S. market is based on its experience in Europe. Canal Plus middleware is embedded in 4 million Canal Satellite digital interactive set-tops.

Some 96 percent of Canal Satellite subscribers use at least one interactive feature a day. The Mosaic navigator, which allows consumers the ability to view 20 TV channels simultaneously, is used by 82 percent of subscribers each day.

Another 77 percent use the electronic-program guide; 74 percent use customized interactive weather-information applications; and 57 percent play networked games.

Overall, interactive weather generates 10 million visitors per month, networked games 2.2 million sessions per month and a new pari-mutuel betting horse-racing service has generated $500,000 a month in revenue, Orduna said.

It's that experience Canal Plus hopes to bring to the U.S. market.

"And the easiest transmission path is HTML," which is the basis for MediaHighway, Orduna said. To date, Philips has deployed more than 10,000 DVB-compliant set-tops in the former MediaOne Jacksonville system.

Canal Plus has pushed hard to expand that broadcast-only trial to interactive applications. And with AT & T's decision to launch a Liberate Technologies-enabled interactive trial by year's end, Orduna sees Jacksonville as the perfect place.

"Liberate has a great browser," he says. "There's no reason, once it's OpenCable compliant, MediaHighway couldn't run on it."

Canal Plus also got a boost last month when CableLabs selected Sun Microsystems Inc., along with Microsoft and Liberate, to write the OpenCable specifications. Canal Plus, Open TV and Power TV were asked to make "key" contributions.

"By selecting Sun as a primary author, we believe every set-top box will require a Java Virtual Machine environment," said Jean-Marc Racine, CEO of Canal Plus U.S.