AOL Plans Low-Key Debut for TV Unit in July

America Online Inc. plans to launch its much-anticipated interactive television service--AOLTV--in July, marking the latest effort to bring e-mail, instant messaging and Web browsing to home TV screens. In an announcement expected today, the company is to outline its new service, which will compete with Microsoft’s WebTV. It is to debut in Sacramento, Phoenix, Baltimore and five other yet-to-be-determined cities the second week of July and will be rolled out across the country through the fall, leading up to a Christmas shopping push, company officials said. AOL is playing down expectations for AOLTV, and analysts say growth could be slow as consumers are introduced to the product. Interactive television services, most notably WebTV, have thus far failed to take off in the marketplace. But unlike competitors, analysts say AOL has a huge trump card: 23 million subscribers who already are familiar with the company’s service. WebTV has signed up about 1 million subscribers since it was launched. AOL will sell the necessary set-top boxes for $250. Monthly fees will be $14.95 for AOL members and $24.95 for nonmembers. The fee for members will be on top of the $21.95 they already pay per month for Internet service. Last week, AOL reached an agreement with TiVo Inc. to offer AOLTV subscribers the ability to create their own TV schedule. On Friday, AOL closed at $54.50, down 50 cents on the New York Stock Exchange.