Prodigy's Quest For The Couch Potato

While on-line services are enjoying a surge in demand, thanks to the Information Superhighway hype, they are also grappling with a troubling long-term problem: Their market is limited to the 13% of U.S. homes with a modem-equipped personal computer. But if they could reach every home with a TV, their opportunities would expand dramatically.

That's just what Prodigy Services Co. has in mind. Prodigy is developing a version of its service that can be viewed on an ordinary TV. While CompuServe and America Online also are looking at TV services, Prodigy is furthest along. Its service, called Prodigy TV, would be delivered over cable--which means it's up to your cable system to agree to carry it. So far, several cable operators, including Cox Enterprises Inc. and Media General Inc., have shown an interest. The service, now just a prototype, won't be tested until late this year, says Harley Manning, Prodigy's creative director. That's because it requires new souped-up cable converter boxes, which pack the power of a PC. In addition, Prodigy TV can only run on cable systems that have a return signal from the home, a still rare feature.

Prodigy TV bears little resemblance to today's PC-based service, which is delivered over ordinary phone lines. The biggest difference is that you can watch regular TV shows when on-line. All the while, Prodigy lurks in the background. If a news story comes across the Prodigy network that is of interest to you, based on topics you've selected, Prodigy alerts you with an on-screen logo. A click on your remote reduces the TV show to a window on the screen, allowing you to read the story. You also can tap into other Prodigy services, such as weather, sports, and shopping--all without missing a minute of Roseanne.

The prototype also includes links with TV shows to provide features not available on the PC. For example, while watching MTV, you could pull up the lyrics to a video or even order a compact disk or tape of the band by connecting with one of Prodigy's existing on-line merchants.

KEYBOARD, TOO? Manning says Prodigy TV, whose pricing hasn't been determined, could provide many of the interactive services promised by the Information Superhighway more easily and cheaply than other would-be providers. Prodigy can leverage its existing service, which has the required computing power and software. But some services, such as bulletin boards, may be missing from the TV version. That's because it would be hard to type a message without a keyboard. Although some new cable boxes will include keyboard plugs, Prodigy thinks few consumers would use them.

Will Prodigy TV fly? Some experts are skeptical. They say it may have a brief window of opportunity until the more advanced interactive services promised by cable and phone companies themselves come on line. These services will allow consumers to tap into thousands of movies, TV shows, and educational videos. And without bulletin boards, Prodigy TV would lack one of the most popular features of today's services, notes Denise Caruso, an analyst with the new-media firm Friday Holdings. But Prodigy enjoys one advantage these newcomers lack: four years' experience running an interactive service. At least in the early going, that experience may provide a crucial edge.

Before it's here, it's on the Bloomberg Terminal.