Red tapism spoils Video-in-car plans

Sue Zeidler

LOS ANGELES: The fight for the next big entertainment market is shifting from the couch to the carseat, but analysts say ambitious media companies aiming to roll out video for automobiles face licensing and regulatory hurdles.

Software, cable and satellite media providers at the Consumer Electronic Show in Las Vegas this week were keen to capitalize on the success of DVD players in automobiles.

Cable company Comcast Corp. and electronics maker Delphi Corp. are working on a system that may allow drivers to view movies they downloaded at home. They can also use wireless technology to download videos when driving by connection hubs.

They have given themselves six to 18 months to develop such a service but set no date for consumer delivery.

DirecTV Group Inc is also working on an in-car TV service with automotive antenna maker KVH Industries Inc. One analyst said there may be problems for such a service to keep receiving a satellite signal if a car went under a bridge or another obstruction.

And Sirius Satellite Radio Inc. said it will beam video to cars in 2006, using Microsoft Corp. software. That target date is now a year later than it was at last year's trade show.

Sirius' rival, XM Satellite Radio has also demonstrated video capability but has no immediate plans to launch a service. XM CEO Hugh Panero said he questioned the business viability of in-car video because video screens are included in only a tiny number of the estimated 17 million cars sold each year in the United States.

Both XM and Sirius have forged deals with automakers to have their radio receivers installed in cars, but Sirius did not disclose any automotive deals for video.

Regulatory issues could potentially arise. After Sirius announced its video plans last year, the Federal Communications Commission said it was exploring whether such plans were permitted under Sirius' current authorization or if it would require a new regulatory decision.

The FCC declined comment this week and Sirius said it was unaware of regulatory issues involving its video plans.

Additionally, analysts said the technology could use fine-tuning.

"XM and Sirius could offer video now, but it's also a matter of allocating bandwidth. As compression technologies improve, it'll be easier to offer video because more bandwidth will be available within their spectrum," said Janco Partners financial analyst April Horace.

Satellite radio providers would have to make deals with content companies and even cable companies' existing video deals with studios would need to be revisited, said Owen Sloane, a lawyer with Berger Kahn in Los Angeles.

"If a studio granted Comcast the rights for 'Cold Mountain' for cable TV broadcast, there's an issue of interpretation as to whether that would apply to transmission to cars," he said.

Nevertheless, many believe that market forces will prevail.

"It may result in a whole new form of contract, but I think it will happen, particularly since studios are always looking for extra income," said Jay Cooper, entertainment lawyer with Greenberg Traurig in Los Angeles.