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RCA Bows WebTV, Digital Cameras

Thomson said it will enter the WebTV terminal and digital camera categories in the fourth quarter and detailed plans to use a New Media Services business unit to create incremental revenue streams from its digital product platforms.

RCA's CDS-4700 megapixel camera

The two new product categories highlighted an RCA fall product line review theme "See Us Now" to underscore the company's expanding role into interactive television platforms, products and services.

As part of that initiative, Thomson senior VP Michael O'Hara said RCA would first introduce a WebTV Plus Internet receiver at a $249 suggested retail, including wireless keyboard, in October. The product represents the first in a series of interactive products Thomson is developing with strategic partner Microsoft. The two companies are working on enhanced television systems that will be introduced to the world marketplace later this fall in Europe.

The RCA WebTV Plus terminal (RW-2110) will operate with the WebTV Plus service and will perform essentially the same functions as those marketed by Mitsubishi, Philips and Sony, though it does offer different styling and includes a universal remote.

The introduction by Thomson of a freestanding terminal represents a reversal of a position stated earlier by senior executive VP Jim Meyer that Thomson would not have a me-too competitor to boxes already on the market, and it clearly delays until next year the expected introduction of TV with built-in WebTV capability.

Thomson also said it would enter the digital still camera market in part to exploit the synergy the product lends to Internet devices. Using e-mail service, users can download digital still photos from a camera and attach the image files to e-mail messages that can be sent to other WebTV and PC users.

Two models will be offered under the RCA brand. The entry camera is a basic VGA-resolution model (CDS-1000) designed for users interested primarily in sending snapshots via e-mail. It includes 2MB of internal memory and a fixed-focus lens at $199. The second model (CDS-4700) is a megapixel camera with 2" LCD viewscreen, optical viewfinder, 8MB CompactFlash removable memory card, 2x zoom lens and 1,320 x 1,024 pixel image resolution.

The selection of the CompactFlash media format is significant because Thomson will begin to ship next month its Lyra MP3 Internet music player, which also uses that storage format. The cartridge will be cross-compatible between the cameras, and the Lyra and will be sold as an RCA accessory item.

At a meeting with the media, Meyer said the recent corporate restructuring will help the company's focus on developing services to enhance the value of its digital platforms and creating new sources of ongoing residual income.

Lou Lenzi, Thomson New Media VP, illustrated his company's strategic approach to this goal as a three-level pyramid with mass market applications, such as the electronic program guide (EPG) offered by Gemstar, a company in which Thomson holds a 7% equity stake, as the base. The EPG offers users new levels of convenience and ease of use, retailers a hot new feature to sell in a wide range of RCA TVs, and Thomson incremental revenue via the sale of space for ads and promotions.

To help exploit this new business Thomson, Gemstar and NBC have created the Television Data Network, to provide programming information and onscreen news services in the EPG. The company will generate revenue by selling ad space on the EPG "real estate," Meyer said. The company's goal is to have 10 million TVs with EPGs in the market within the next two years.

The second level of the New Media pyramid encompasses new data-enhanced broadcasting services with return-path capability to conduct direct-marketing and direct-response services in real time. Thomson is working with the Advanced Television Enhancement Forum to create a specification for html-based TV enhancement systems while helping to accelerate the creation and distribution of interactive TV programming.

At the top of Lenzi's pyramid is web-based interactivity, including the migration to full WebTV subscription services offered through set-top boxes, with the top level representing web-based interactive services that deliver the full benefits of the web to the TV-viewing experience.

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