THOMSON TOUTS INTERACTIVE TV SYSTEM

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Thomson Consumer Electronics is trying to use its digital satellite technology to become a major provider of interactive TV hardware.

Thomson, marketer of RCA TVs and Digital Satellite System decoders, is linking with Sun Microsystems to form a new joint venture company to market the system, dubbed Open TV, to telephone companies and cable TV operators.

Thomson demonstrated Open TV at the Winter Consumer Electronics Show in Las Vegas earlier this month, including interactive ads its agency-Ammirati & Puris/Lintas, New York-had created to showcase the system's effectiveness.

Though not quite up to the level of interactivity of the Time Warner trial in Orlando, Thomson claims Open TV offers most of the bells and whistles at a far lower cost.

The system can play up to 15 2-hour movies on demand, with fast-forward, reverse and pause functions. Advertisers can send interactive messages that overlay the picture on the TV screen, and consumers can use a built-in modem to respond.

One demo ad at CES showed how consumers could use a remote control to request product information during a TV spot for RCA products. Other ads were for MasterCard International, Aetna Life & Casualty and Stanley tools.

Thomson and Sun claim the system is the first allowing cable and phone companies to step into interactive TV on an "as desired" basis without massive investment.

Instead of spending millions of dollars to create new interactive systems, cable companies can convert a portion of their channel capacity to digital to offer the new interactive services almost immediately.

"It could be operational within 1995," said Elliott Broadwin, VP-marketing for the as-yet-unnamed joint venture company. Mr. Broadwin and other Thomson executives claim that because the system uses existing technology and the set-top boxes developed for the satellite system, the cost is far less than what rivals are charging.

Interactive TV analysts were cautious about drawing implications too quickly from Thomson's move.

"I saw a demonstration and it looked impressive, but whether the average cable system can deploy it is still uncertain," said Peter Krasilovsky, senior analyst at Arlen Communications, a Bethesda, Md., consultancy. Cable systems would still need to have the channel space to offer the digital signals and two-way capability, he added.

Open TV is only one of several interactive TV hopefuls. Companies ranging from Scientific Atlanta to Microsoft Corp. to Apple Computer have all weighed in with plans to develop set-top boxes allowing interactivity.

Thomson claims the growth of DSS gives it a major advantage; nearly 600,000 satellite packages have been shipped in less than a year, far ahead of projections.

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