Three giants from the cable television, computer software and banking industries agreed Tuesday to band together in developing a new service that will enable consumers to do their banking through their television sets.
The deal, the first of many expected to emerge as companies scramble to take advantage of the convergence of computers and televisions, was struck early Tuesday morning by cable powerhouse Tele-Communications Inc., BankAmerica Corp. and software leader Intuit Corp.
Executives from the three companies said it will be at least a year before the service is launched, but that it will eventually be available to millions of TCI subscribers through a new generation of set-top boxes designed to function much like computers.
Bruce Ravenel, executive vice president of interactive ventures at TCI, said consumers will be able to do everything from paying their bills to buying life insurance to balancing their checkbooks--all through their television sets.
The deal follows a number of failed experiments with at-home banking and other interactive services over the last two decades. But new Internet technologies have solved many of the earlier problems, and now companies from an assortment of industries are clamoring for a piece of what could be a vast new market.
"This is a potentially big deal for banking," said David Coulter, chief executive of San Francisco-based BofA. "I can't assure you that interactive TV is going to stampede out of the gate, but this is a great way to serve our existing customers and acquire new customers."
Analysts said the deal gives the companies a jump on their respective rivals in staking out a potentially lucrative market.
"It's a strong deal for all the parties involved," said Jill Frankle, an analyst at International Data Corp. in New York.
Company executives said many of the details of the partnership--ranging from what the new service will be called to how much capital each partner will contribute--have not been worked out.
But the basics of the agreement are clear. Englewood, Colo.-based TCI will provide the access to as many as 6.5 million living rooms in the coming years; Menlo Park-based Intuit, which apparently beat out Microsoft Corp. for a role in the deal, will deliver the software that powers the service; and BofA will handle the actual transfer of funds and other financial measures.
Of course, consumers with PCs can already conduct financial transactions over the Internet. But Ravenel said this service, which will eventually be open to other financial institutions, will be free to TCI's cable subscribers. Executives from all three companies stressed that there are far more cable subscribers than PC owners in the United States.
The partnership would get its revenue through transaction fees, commissions, and advertising payments.