Microsoft Upgrades WebTV Setup

Microsoft Corp. plans to announce tomorrow (Oct. 5) an updated version of its WebTV set-top box — dubbed MSN TV2 — that adds broadband features to what’s been a product designed for homes that get narrowband Internet access from the TV set, rather than the PC.

The new $199 set-top, made by Thomson Consumer Electronics under the RCA brand name, will feature a 733-Megahertz Celeron processor from Intel Corp., 128 Megabits of random access memory and 64 Megabits of flash memory.


The monthly service is priced at $21.95, with a broadband option that’s available for $9.95 a month.

The new set-top can be used with home wireless networks, allowing consumers to view photos, music and even home movies stored on their PCs via their TV sets, Microsoft said.

At the same time, the new set-top is designed for homes that don’t have PCs or do not have Internet connections.

MSN TV2 is the successor set-top in Microsoft’s WebTV product line.

Microsoft bought WebTV in 1997, and at one time counted 1 million subscribers. The company isn’t releasing current customer counts, but Sam Klepper, general manager of MSN, said “subscribers love the product.”

He said 70% of subscribers don’t surf the Internet. “What they do primarily is they use it for communications and e-mail. They can stay in touch with family and join the Internet revolution.”

Popular features include photo sharing and, to a lesser extent, instant messaging and chat. Because most existing connections are dial-up, WebTV users don’t use the volume of video on the Internet, compared with broadband users. But they often link to web sites embedded in e-mail messages.

MSN TV2 will provide an even better experience, Klepper said.

“This is a nice upgrade for the current user. It’s faster Internet Explorer technology [IE6], a much faster experience and more compatibility with the Web,” he said.

The new software allows consumers to open Microsoft Word documents and PDF files, and access any or Hotmail ( e-mail addresses.


“We expect a good percentage of our base to be interested in the product,” Klepper said. “And this product also has capabilities for the broadband household and those using home networks.

“With the broadband home, a high percentage have home networks. They have digital photos, music on their PCs, even home videos. It’s all kind of locked up on the PC. Our product frees that media up to bring it to the TV and living room area.”

The service also will feature more than 100 videos from MSN video and MSN’s commercial-free radio service from 200 radio stations.

Klepper said MSN will distribute the device in its current lineup of retailers, including Best Buy Inc., Circuit City Stores Inc. and CompUSA.

It’s also available online via (, Brookstone ( and Microsoft’s Web site (