Time Warner: Ready, Set, Interactive

AFTER A LONG DRUMROLL, Time Warner unveiled its first fully interactive cable system on Dec. 14 in Orlando. Chairman Gerald Levin held an elaborate daylong demonstration to show off a system that delivers movies, home shopping, and video games at the touch of a button. After months of delays and questions about the technology, the fact that the system functioned smoothly is a victory of sorts. But to build a real business, Time Warner must reduce the cost of the system's set-top box. Consumers probably won't be willing to pay more than $300 per box, estimates Edward McCracken, CEO of Silicon Graphics, which supplies most of the system's software. The boxes currently cost far more than that.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.