Microsoft recently announced its plans to develop a new interactive television that will allow viewers to play songs via a digital dukebox, get involved with a movie and even chat to an actor.

Microsoft have been developing this initiative with UPC, who are Europe's largest cable company in the development of interactive IT for almost two years. They have also invested millions into cable companies in Europe and the United States, also including Telewest and NTL. Microsoft also bought interactive TV - WebTV so that they could develop its Windows platform for the digital interactive TV market.

The aim of the software is that it will run using Microsoft Whistler, or on a cable television set-top box possibly by mid-2001. Many of these functions will be offered by other companies, however Microsoft has combined these features so that they can be operated by a remote control from the same room where the television is.

UPC however, having experienced further delays in the delivery of Microsoft software decided to use digital TV software from Liberate Technologies. Microsoft have been experiencing problems since early August after two high-profile roll-outs of digital set top boxes running its software was not ready. This resulted in the cable operator having to postpone the planned September launch of its digital services in Amsterdam.

UPC Chairman Mark Schneider stated that Microsoft had lost their preferential rights because of the failure to deliver software in time. He also stated that Microsoft will have to compete for a planned upgrade of software on its Amsterdam network for next year and UPC will begin the roll-out of a set-top with minimal functionality from October.

In the long-term it is still anticipated that Microsoft TV will be widely deployed using UPC's network.