Thomson May Announce Divx Investment

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January 07, 1999 (12:00 AM EST)

By Mark Harrington,

Thomson Multimedia, in what it called an industry first, on Wednesday played HDTV through a new high-end Divx player under its ProScan brand and indicated further involvement in the DVD format.

The French-owned TV conglomerate at a pre-Consumer Electronics Show media briefing announced it expects to ship such an HDTV unit in about a year, as it strengthens its alliance with the creators of a format it said shipped about 100,000 units under its brands during the first 90 days of sales. Total DVD player sales exceeded 1.1 million units last year, according to Thomson officials.

Thomson said Divx was particularly suited to HDTV programming because of its "highly secure cryptographic technology," which appeases copyright owners' piracy concerns. James Meyer, chief operating officer and executive vice president of Thomson, declined to discuss the price of such a unit.

Meyer also said the company is open to the notion of investing in Digital Video Express, but said the companies are already working so closely now that an investment isn't immediately warranted. Nevertheless, he said, Thomson is "constantly looking at investment opportunities," and Divx is a future possibility. Digital Video Express is primarily owned by retailer Circuit City, which has been actively seeking investment partners for more than a year.

Thomson also said it is expanding its lineup of multimedia monitors, based on strong sales of a unit shipping since last year, and it will begin offering the products through computer superstores for the first time. The monitors, under Thomson's RCA and ProScan brands, will be available in screen sizes from 27 to 36 inches, and can be used for video-game, high-end PC graphics, and high-end TV functions, including DVD playback.

The 36-inch ProScan model PS36800 will carry a $2,799 suggested retail price, and the 32-inch ProScan PS32800 will carry a $2,299 SRP when both ship next month. Thomson this summer will introduce a 36-inch RCA-branded multimedia monitor, model MM36100, at a $2,599 SRP, and a 27-inch version at a $1,599 SRP.

Thomson said it also expects to introduce TVs through a joint venture with Microsoft's WebTV division that will allow new levels of interaction and services. Called enhanced television, or ETV, the new TVs will enable such functions as online shopping and interactive polling, and add less than $200 to $300 to the cost of a set, Meyer said. The first ETVs are due in the fourth quarter, Meyer said, adding they offer considerably more than WebTV functionality added to existing TVs.

Thomson in November received equity investments from Microsoft, communications giant Alcatel, electronics conglomerate NEC, and home satellite service DirecTV. The investments are expected to accompany technology-sharing that will become evident in all of Thomson's businesses.

In other news, Thomson showed a $649 set-top DTV converter box that lets viewers with analog TV sets receive digital programming from DTV and DirecTV forms; a news-on-demand feature called NewsGuide for RCA, and ProScan TVs that let consumers receive text-based messages and late-breaking news from MSNBC; and a wireless modem jack that lets consumers use their home electrical wiring to link to the main telephone system, eliminating the need for wired phone jacks.

Thomson, which said it had put behind it several years of profitless operations, also reported it had begun production of its first digital cable modem. The DCM105 is expected to be available this year at a price yet to be announced.