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AOLTV Begins Soft Launch

New York — America Online and Philips announced here last week plans to roll out the first AOLTV terminals in mid-July, starting with Circuit City stores in selected markets.

Earlier, AOL said it would take an equity stake in TiVo, the personal video recorder service, and would integrate TiVo into its AOLTV services in the near future. Meanwhile, Philips and DirecTV announced the first DirecTV receiver and TiVo “combi” recorder would ship by late fall.

The AOLTV service, which is designed to give a scaled-down AOL PC experience over ordinary television sets, can be added on to current AOL PC accounts, the company said. Current AOL PC service subscribers can have AOLTV service for an additional $14.95 per month. Users who want only an AOLTV account will be charged $24.95 per month.

AOL said it has targeted Baltimore, Phoenix and Sacramento, Calif. as initial launch markets, using Circuit City stores or direct from AOL’s e-commerce areas. The Philips AOLTV set-top box will sell for $249 and will be distributed initially through Circuit City stores, but other retailers may soon follow, according to an AOL spokesperson.

The new service will incorporate recent feature upgrades that were added to version 5.0 of the ISP’s PC software. This will enable two users on the same account to log on at the same time, which means a person could use AOL on a desktop PC in one room while another uses the AOLTV service in the den.

Included in the box is a USB port for future connection to broadband modems, such as cable or DSL modems. Each box will include a wireless keyboard and a 5GB hard drive for limited downloading.

Perhaps the most useful function of the system will be the ability for AOL users to check their e-mail messages while watching television. They can also use the popular AOL Instant Message system to converse with other AOL users in real time, and use a new interactive onscreen TV program guide to tune to TV programs or set VCRs to automatically record a program, using supplied IR blasters. Guides can be customized to display listings for appropriate broadcast, cable or satellite services.

Users can talk in chat rooms about TV programs they may be watching at that moment, or play along with TV games that offer Internet-enhanced services. An AOL spokesperson said the service is currently working on enhanced TV services to converge the TV and AOLTV experiences.

Another AOLTV receiver will be unveiled later this year by Hughes Network Systems, sister company to DirecTV, which owns an equity stake in TiVo. At CES in January, HNS said it was working on a combined DirecTV/AOLTV terminal.

Meanwhile, in its agreement with TiVo, AOL will become the largest shareholder in the personal video recorder company, taking a 15 percent stake. AOL will then work with TiVo on a device to merge its AOLTV service with TiVo’s technology and get manufacturers to support it.