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Nonetheless, Motorola must clear the same copy protection hurdles as Microsoft and TiVo before it can offer custom TV. Protection schemes will likely be part of a box’s underlying operating system, which puts the onus squarely on companies like Liberate Technologies and OpenTV that supply platform software to hardware makers like Motorola. The specter of Microsoft dominating this critical arena with its own proprietary operating-system standard-just as it has PCs-seems to have galvanized action. In June, just three months after Microsoft’s UltimateTV hit the market, two dozen companies, including Motorola, TiVo, OpenTV and Liberate Technologies, announced they had formed an alliance based on the open-source operating system Linux. This TV Linux Alliance aims to establish specifications for interoperability that would let consumers buy whichever television, set-top box or digital video recorder they wanted, and subscribe to whichever television distribution service they wanted-and be sure everything would work together. Linux would thus become the operating system for all platforms-UltimateTV excepted. Only Microsoft has the power and cash to fund deployment of an operating system by itself, says Bryan Sparks, CEO of Lineo, one of the platform firms involved in the alliance. “The alliance makes sure the rest of us don’t miss an opportunity to compete with them.”

Although digital video recorders and set-top boxes are the front-runners, a third contender threatens: the video game system. Sony’s PlayStation 2, for example, already has a microprocessor that surpasses those in digital video recorders, plus a video processor robust enough to control a TV set-and it recently added Internet access and online gaming options. This month, Nintendo was to release a similarly powerful machine called the Gamecube, and Microsoft was to begin selling the Xbox in the United States. All three devices lack tuner cards to receive TV signals and hard drives to store and replay shows. But these capabilities could be added, and as broadband expands, online gaming could begin to erase the difference between games and TV shows. Robert Bach, chief Xbox officer at Microsoft, says the company already envisions “episodic content,” where new scenarios, characters and storylines are injected as online games proceed. “It is much more like producing a show than creating a game.”

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