Convergence Takes New Twist with Hearst-Argyle/Geocast Deal

As TVs become much more like computers, computers may become much more like TVs. That's one implication of a $10 million deal signed in early October by Hearst-Argyle Television and Geocast Network Systems. The two companies plan to deliver a new-media program service to personal computers using a portion of Hearst-Argyle's over-the-air digital broadcast spectrum. The programming to be offered will originate with national networks, local TV stations, and other information and entertainment services.

Geocast, of Menlo Park, California, was formed earlier this year with substantial backing by three heavyweight venture-capital firms. The company is developing hardware, software, and network infrastructure to deliver the service. One essential piece of hardware is an external receiver that will connect directly to the PC. The receiver will accept live feeds and have enough hard-drive capacity to store programming for on-demand retrieval, not unlike the personal video recorders from companies like TiVo and RePlay TV.

Hearst-Argyle owns or manages 26 television stations and seven radio stations in widespread American markets—among them Honolulu's KITV, the nation's first commercially licensed digital TV station, and four other DTV stations on the mainland. The company's 17.5% penetration of the US TV market makes it one of the two largest non-network-owned TV broadcasting groups in the US. Hearst-Argyle will take an equity interest in Geocast in return for the infusion of cash.

When the Federal Communications Commission first distributed the rights to the digital broadcasting spectrum, it was widely speculated that the full spectrum might be used for purposes other than high-definition television—including the delivery of information services. The Geocast venture may be the first novel use of a television broadcaster's allotted spectrum. A portion of each Hearst-Argyle station's DTV channel will be used to give consumers "instant access to their own personal selection of local and global information and entertainment offerings," according to a press release. Geocast's service will have the effect of allowing individuals to create their own customized TV channels.

"We'll be able to provide television audiences with HDTV, and using merely a portion of our over-the-air digital spectrum, we'll be able to provide computer users with a variety of media-rich and localized content directly to their PCs," said Bob Marbut, chairman of Hearst-Argyle. "This is the first of an exciting new wave of data-delivery applications and opportunities created by digital broadcast television, and is made all the more promising given the consumer-electronics industry's rapid development of new technologies."

Career venture capitalist and Comcast CEO Joe Horowitz put it this way: "The Internet is revolutionizing our economy and personal lives. By partnering with leading broadcasters like Hearst-Argyle, we can make programming with full-motion video and CD-quality sound instantly available to PC users. Our approach doesn't replace the Internet, but rather frees it up to do what it does best.''

Comcast intends to fill the void created by the current trend toward homogenization in broadcasting. "Television broadcasters have, for a half-century, provided a unique service to local communities in the form of local TV news and public-service programming, as well as community service,'' said Hearst-Argyle president David J. Barrett. "We have invested substantial sums at our stations to implement DTV in order to provide newer and better service to our local constituents . . . it represents a major step toward the future of broadcast television and its ability to serve viewers, advertisers, and other constituents.''