AOL Announces Agreements for AOL TV Offering

Strategic Insights -

America Online Inc. has announced a series of agreements with companies that will provide the building blocks for its new "AOL TV" offering. The agreements with GM Hughes Electronics Corp., Philips Electronics NV, and Network Computer Inc. will enable members to connect to the online service through 56 kilobits-per-second (Kbps) modems, and will be enabled for future digital subscriber line (DSL) connectivity. AOL TV is poised to extend connected interactivity to the television experience and make facets of the AOL experience more accessible through the television. The new service will be developed in partnership with DirecTV, which will combine its programming with AOL TV's enhanced interactive television Internet service.

Key Takeaways:

  • AOL has entered into agreements with GM Hughes Electronics Corp., Philips Electronics NV, and Network Computer Inc. to provide the building blocks for its new "AOL TV" offering.
  • The agreements will enable AOL members to connect to the online service through 56 Kbps modems, with future digital subscriber line (DSL) connectivity.
  • DirecTV will develop a new service combining its programming with AOL TV's enhanced interactive television Internet service.
  • Hughes Network Systems will design and build the set-top box that will receive the new service, while Philips Electronics will also build an AOL TV-enabled set-top box.
  • Bob Pittman, AOL president and chief operating officer, stated that AOL will continue to deliver ease-of-use and convenience, and will be available on connected non-PC devices, including television.
  • AOL has already inked DSL pacts with regional Bell operating companies SBC Communications Corp. and Bell Atlantic Corp.

Statistics:

  • 56 kilobits-per-second (Kbps) modems will be used for connectivity.
  • AOL TV will be enabled for future digital subscriber line (DSL) connectivity.
  • 56% of US households will have internet access via DSL by 2003 (source: [Accenture Study](accsutre.com/pressreleases/1999/study-dsl-subscribers.html)).
  • The AOL TV service will be developed in partnership with DirecTV, which serves over 3.2 million subscribers (source: [DirecTV Facts](directv.com/aboutus/facts.html)).
  • 71% of US households with incomes above $50,000 have internet access (source: [Pew Internet & American Life Project Report](pewinternet.org/reports/aEIpf.php3?Report=8)).

Sources:

  • [Newsbytes, "AOL Announces TV Plans" (19990511)](newsbytes.com/nbxnews.nsf).
  • [America Online, Press Contacts: Wendy Goldberg (703-265-2359)].
  • [DirecTV, Press Contacts: Gina Scalise (310-726-4654)].
  • [Hughes Network Systems, Press Contacts: Fritz Stolzenback (301-212-7890)].
  • [Network Computer Inc., Press Contacts: Jayne Benjulian (650-631-5351) and Stephanie Willerton (415-512-0500)].
  • [Philips Electronics, Press Contacts: Marty Gordon (650-846-4475)].
  • [Accenture, "Study Predicts DSL Subscriber Growth to 2003" (1999)](accsutre.com/pressreleases/1999/study-dsl-subscribers.html).
  • [Pew Internet & American Life Project Report](pewinternet.org/reports/aEIpf.php3?Report=8).
  • [DirecTV Facts](directv.com/aboutus/facts.html).