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DirecTV Clears iTV Deck

DirecTV's dumping of Wink at the end of the year leaves the OpenTV interactive service with 10.4 million fewer users and opens the door for Canal Plus and NDS in the U.S. market, "OpenTV has been a little cagey in telling the market where they stand in terms of combining Wink and OpenTV's platforms, as well as their future plans," says Yankee Group media analyst Adi Kishore. "Typically, if a company is cagey, it suggests they aren't very clear on their own strategy or where they're going."

OpenTV executives weren't available for comment.

The news came on the heels of OpenTV's third-quarter report, with earnings of $17.1 million, up 27% from third quarter '02. The gains were attributed to $2.9 million in royalties in Europe, the Americas and Asia. Year-to-date revenues from its DirecTV deal amounted to $1 million, a dollar figure that CEO James Ackerman said in a statement wasn't economically viable nor in the long-term best interests of OpenTV.

For DirecTV, the move away from Wink opens the door on deployment of Canal Plus interactive services, which make use of NDS Group middleware and conditional-access technologies. It also offers a look at News Corp. synergy: Last June, DirecTV announced that it had selected Thomson's MediaHighway interactive middleware to provide Java-based interactive services; then, in September, NDS, which is owned by News Corp., acquired MediaHighway's middleware division from Thomson for 60 million Euros, a move that gave NDS middleware to complement its conditional-access technology.

In a transcript of OpenTV's earnings call provided by, Ackerman said NDS's purchase of MediaHighway aligns NDS as a head-on competitor of OpenTV. Hence, the end of the deal with DirecTV.

Whether NDS can find success beyond its parent company's holdings remains to be seen.

"My recollection is that the majority of NDS's conditional-access business today is with the News Corp. platforms," said Ackerman, referring to services like BskyB. "But the majority of OpenTV's deployments are spread across 50 cable and satellite operators around the world, and they aren't tied to our ownership per se."

All interactive eyes will be on DirecTV in 2004, Kishore says, with cable operators in waiting to see what interactive services develop on the Canal Plus platform. "The industry will see what happens and then move quickly to deploy those applications that are successful."