Zenith to Unveil First Interactive TV-Web Browser Set

Zenith Electronics Corp. plans to push the convergence of television and computers to a new level, introducing the first U.S. set that lets viewers connect to the Internet as they watch TV.

The $600 set, which should hit the market by July, enables free Web surfing, online shopping and e-mail through a built-in dial-up modem. Other companies provide these services through set-top boxes, but they charge more than $22 a month.

“More people all the time interact through their computer while they’re watching television,” Zenith spokesman John Taylor said. “This is sort of a seamless, integrated experience for those who want to watch television and surf [the Web] at the same time.”

The set reflects the burgeoning interest in interactive TV among consumer-electronics companies, cable operators, satellite services and broadcasters. Consumers, however, have shown limited interest--Microsoft’s WebTV, the most popular interactive TV service, has attracted only about 1 million subscribers after four years of promotions and heavy subsidies.

Analyst Richard Doherty of the Envisioneering Group, a technology consulting company, said Zenith’s approach is “pretty compelling.”

“It will probably attract a lot of the people who either gave up on Web TV . . . or held off because of the high price to begin with,” Doherty said.

The fact that the Internet capabilities are built in to the Zenith set, and not contained in a separate box, should appeal to consumers irritated by the clutter in their living rooms, Doherty said.

Zenith has been trying to introduce an interactive TV for several years, but its efforts were hampered by problems among its former technology partners. It developed the new model with the help of privately held TeleCruz Technology Inc. of San Jose, which makes the equipment and software needed to connect to the Net and display Web pages on a TV.

The two companies are expected to announce the set today, with a formal unveiling at the Consumer Electronics Show in January.

The initial version, which has a 27-inch diagonal screen, emphasizes simplicity over power. Unlike some set-top boxes, the Zenith sets won’t be able to take advantage of the interactive enhancements that networks and advertisers are starting to add to their video.

Instead, the sets will provide quick and easy access to a handful of consumer-oriented Web sites chosen by Transcast International Inc. of Palo Alto, the company providing the free Internet access. They also will let viewers display Web programming at the same time as selected TV shows, either as an on-screen box or as a translucent overlay, TeleCruz founder Kris Narayan said.

TV programmers increasingly are encouraging viewers to put computers and TVs in the same room so they can watch a show and interact with its Web sites simultaneously--something an estimated 40 million U.S. viewers do. The Zenith set, Narayan said, can merge that programming onto one screen.

Some of the interactive material will be stored in the TV set, letting viewers retrieve it as quickly as flipping to a new channel. Much of it will have to be downloaded through a phone line, however, as will the e-mail users send and receive through their sets.

Transcast is providing subsidies to pay for the TeleCruz technology and marketing, Narayan said. Transcast hopes to recoup those expenses by collecting a fee from online merchants and advertisers, Transcast founder Ramon Cazares said.

TeleCruz is a major investor in Transcast. Zenith is a wholly owned subsidiary of LG Electronics, a manufacturer based in Korea.