Sky Television is dipping a toe in the sea of interactivity - but don't expect full Internet access via TV any time soon. Or ever.
Sky announced yesterday that it planned to provide email services via its digital decoders within six months.
It also announced the formation of a new Technology Development and Interactive Broadcasting Division, which will develop the email and future interactive services - in some cases customising applications developed overseas.
"We just looked and thought, what will provide a high perceived benefit to consumers that don't have a PC or an Internet connection?" says Sky CEO Nate Smith. "This one [email] fit the bill. It was relatively easy to do and would have a widespread appeal - and it's not expensive."
Sky also plans to offer a new generation of set-top decoders that include a hard drive, giving customer the opportunity to record up to 10 hours' programming - or the broadcaster the ability to deliver so-called "Impulse pay per view" programming during downtime, for store and later viewing.
Sky's erstwhile partner, Ihug, is working on the same feature, and has been testing multicast delivery of such movies over its Satnet network.
The software for Sky's interactive services will almost certainly be OpenTV, which is already being used by Rupert Murdoch's BSkyB satellite service in Europe. Sky in New Zealand has tended to follow BSkyB's lead on digital TV, launching its service with the same Pace Micro decoders as its British sibling
Despite its name - and its links to open standards champion Sun Microsystems - OpenTV is closed, proprietary, and not Internet-based. In Europe, it is going head-to-head with PowerTV, the system chosen by Murdoch's main rival, NTL, which uses an enhanced form of HTML - and is linked to Microsoft.
The same match-up was set to occur here, until the government postponed approval of TVNZ's digital TV joint venture with NTL.
Smith says Sky has "almost completed" negotiations for the use of OpenTV, including settling what price it will pay for the technology. As a legacy of of its status as the first serious contender in its market, OpenTV comes with stiff upfront and ongoing costs. It was sufficiently expensive to be rejected as an option by Ihug.
Although BSkyB has already begun offering e-commerce and other services based on OpenTV, a scarcity of satellite bandwidth has meant most data services are pushed through the standard modem built into its decoders.
Ihug managing director Nick Wood is emphatic that Sky "will never get Web browsing because of the bandwidth. You'd need a lot more satellite to cover their 400,000 subscribers, and that's not going to happen.
"Not to mention the issues of latency and having to bring it in on fibre and uplink it to a satellite that doesn't have a look path to the US. The likelihood of them ever doing a full-blown Internet service is zero."
Smith agrees that full Internet access via Sky-connected TVs is "not something I envision."
Smith says Sky has not yet begun talking to potential partners for its new services.
"We're just trying to get our infrastructure downloaded and once we've got that sorted out we'll talk to individual players. There's no lack of interest, but until we can quote some real-time expenses as to what it's going to cost to be in the interactive mall, it's fruitless to have too many discussions."
Ihug, meanwhile, is still waiting for its own big push into interactive TV services, and managing director Nick Wood says the company is holding out for "the box with the right goodies on it".
"Our customers this year will have the two products together, but we're not sure exactly when we'll have the hard drive in the set-top box. It could be the third or fourth quarter.
"But primarily, it's still Internet on your PC and TV on your TV, which is how most of our customers want it anyway. We will have a box for people who just want to surf the Web, do email and ASP applications that are designed for games and things like that."