Netgem presents a small, powerful gift from France

Interview with Stephan Crainic, Netgem Director of Business Development for North America

25-DEC-99 -- Ruel.Net -- During this Christmas holiday season, people are exchanging small and large gift-wrapped presents around the Christmas trees in homes around the world. Netgem, a company based in France, is sharing a small box, i.e. a set-top box, for interactive television that it hopes brings a lot of joy to many people around the world.

The Netgem website indicates that the folks at Netgem "Think TV" with their "conclusion that 'critical consumer mass' for the Internet would be achieved most rapidly by using a standard television...." Netgem was formed in April 1996 and came up with its first prototype netbox in June 1996. Netgem is said to have demonstrated the first internet set-top box in Europe. Netgem has been growing ever since to expand worldwide from it European roots. Netgem's director of business development for North America is Stephan Crainic and he provides informative details about Netgem, netbox, Netgem TV, and why small is beautiful.

RH: I've been playing with the PSTN version of the Netgem netbox. The netbox is so small! It's just a little larger than an external modem for a computer. The smaller size makes the netbox less intimidating to new users who are most likely NOT going to be technical whiz kids.

SC: You seem so surprised by the small size of the netbox because most other set-top boxes you've seen are twice that size and often resemble a VCR. We think that a set-top box should in fact be small and elegant enough for people to want to place it on top of their TVs rather than hide it.

RH: Others may be surprised at the size also. But the small size is refreshing to see. So, is the small footprint size of the netbox a part of a trend for set-top boxes or is it just a specific Netgem design factor?

SC: From the beginning, in mid-1996, Netgem has been 100% focused on Internet appliances and on improving the ways people connect to the Internet at home. For that reason, the netbox is a pure consumer market product that was designed from scratch, with elegance and economy from all aspects. Since Netgem has developed both the hardware and the software, we were able to obtain a very small footprint and hardware requirements while offering a rich, open platform, with support for current Internet and enhanced TV standards.

RH: Although there is a conventional dial-up modem in this particular netbox, does the PSTN version of the netbox provide a good representation of what the other netboxes look like? Of course, there may be differences in speed when you compare the dial-up PSTN netbox and the high-speed broadband netboxes. But how about the size and the online interface experience of the boxes?

SC: The same design and form factor is used for PSTN, Ethernet and ISDN connectivity. However, our new netbox³ ("netbox cube") is another example of extreme integration and elegant design: the netbox³ has the shape of a less than 6-inch-wide (15 cm.) cube and has an integrated cable-modem for DOCSIS connectivity. With the exception of the cable-modem layer, the firmware inside the netbox³ is the same as in the other netboxes.

Netgem netbox³
(Picture courtesy of Netgem)

RH: Netgem is based in France, which is one of the early birthplaces of the online interactive experience for various online devices and services such as Minitel. I am assuming that executives and other personnel at Netgem in France are pulling from those and other past real-life experiences.

SC: Basically, Netgem was built around the idea of "Simplifying people's lives using technology." What made the Minitel's success was its simplicity: instant setup, easy access to services, simple and fast text-based interface, large number of services and of course its cost which was fully subsidized by France Telecom. In France, everybody uses the Minitel for banking, travel reservations, catalog shopping and other services.

RH: You have the small netbox footprint which sets it apart from other set-top boxes. What else could set Netgem apart from other companies?

SC: What sets Netgem apart is our focus -- improving the way people use the Internet at home, our independent, open-architecture, award-winning technology, our world-class team of engineers as well as the customization possibilities we can offer to our clients. This, in addition to being a relatively small company, allows us to anticipate and quickly respond to our customer's needs.

RH: So, "small" is beautiful. But Netgem's reputation seems to have a "large" worldwide if not major European reputation. From what I see, Netgem appears to be at least one of the leaders in Europe in providing TV set-top box technology.

SC: Yes, Netgem is the European leader in providing Internet set-top box technology and platforms, with over 200,000 units deployed throughout Europe at the end of 1999. The netbox is being sold primarily in Europe, to telecom operators, consumer electronic manufacturers, ISPs, banks and multi-service operators who want to expand their online communities. Netgem is present in almost all European countries. Italy, Spain, Portugal, Germany, France, Belgium, Finland, Switzerland, Austria, the Netherlands, Greece, etc. as well as in the Middle East and North Africa. The number of Netgem employees has recently grown to more than 45 which prompted us to move to a bigger office building.

RH: What is also "big" is that Netgem was one of the first to announce it was using Linux as the operating system in set-top boxes.

SC: As for Linux, not only has Netgem been the first manufacturer to announce its strong commitment to open-architecture by migrating its firmware to Linux -- as you've reported in March '99 on your Interactive TV Top.Box.News @ Ruel.Net Set-Top Page -- but the netbox has also been the first commercial device for the consumer market that actually runs embedded Linux.

RH: Tell us a little bit about the Netgem TV. It seems like it will be through the Netgem TV set where you have not only Internet on TV, but also the Interactive TV capabilities for an enhanced television watching experience with EPGs, special interactive information and advertising.

SC: Last summer, we took Netgem's motto "Be on TV / Beyond TV" a step further and decided to truly merge TV and Internet by offering the "Netgem TV" reference design as a solution for top-quality low-cost Internet TV. This original design combines the netbox hardware with the television's main board, runs Netgem's software, and therefore it is the first TV set to support enhanced TV using picture over HTML, picture embedded in HTML, on-screen HTML display, picture grab, etc. and interactive TV specifications using iTV triggers, alerts, etc. as defined by ATVEF (Advanced TV Enhancement Forum).

RH: I remember seeing Netgem being listed early on as signing up with ATVEF.

SC: Yes, Netgem is one of ATVEF's early adopters and among the first European companies to integrate ATVEF's standards in a set-top box.

RH: So, this Netgem TV reference design uses Linux also?

SC: Yes, this is the first TV reference design that is based on Linux and HTML, not only for the Internet, e-mail and enhanced TV functions, but for the basic TV commands as well, such as the standard TV setup menus, picture and volume control. Being inside the TV is a much more efficient and elegant way to bring IP-based information, communication, transaction and entertainment services along with enhancements and interaction.

RH: Will we be seeing the netbox in retail stores under the Netgem brandname or under another brandname in the U.S.?

SC: Well, Netgem's business model is not to sell its products directly to end-users but rather to service and content providers, multi-service operators and consumer electronic or TV manufacturers. Most of our customers take advantage of the sophisticated customization and branding we offer them and while the device is in most cases sold as a "netbox" it is often not a Netgem-brand product. We have the same approach for the U.S. market and we are currently talking to some major operators and OEMs about deployment of a customized netbox along with their services.

RH: Okay, the netbox will be sold or distributed by other companies. The consumers who read this interview will be curious about the possible pricing for the netbox. You probably can can't commit to stating a particular price that the consumer should expect.

SC: The cost to the end-user is one of the crucial factors to reach critical mass for an operator. We believe that the netbox should be given to the end-users or sold at a minimal price. For a multi-service or content operator the value of this kind of multimedia IP-gateway in peoples' homes is not the device itself, but the potential it offers for building significant communities, creating direct contact with their customers, enabling transactions and providing simple but meaningful services. Consumers buy simplicity. Simplicity creates value.

RH: Okay, a few more things. According to Netgem's literature, Netgem is a forward-looking company that has anticipated the next steps in the Internet's evolution.

SC: Netgem's vision has been that tomorrow, every home will be equipped with simple, high-speed and immediate access to Internet-based services that will make daily life easier. With the current growth of broadband access for residential users -- cable, DSL, and satellite -- multi-service operators can today significantly increase the value of their networks by adding IP-based services -- information, communication, transaction, entertainment and interactivity -- to traditional TV services. People will access these useful services from many different types of devices throughout the house, but the television will be the primary platform because of its simplicity and the richness of its content.

RH: So, with people accesing these devices throughout the home, how does Netgem foresee the future of interactive television and its place in society?

Interactive TV will be of two kinds. One, enhanced TV experience where the user decides what to watch, when they want and especially how -- pause, replay, camera angle, zoom, audio track, etc. This is made possible by digital recorders and video on demand. And, two, IP-based interactivity, where in addition to viewing a program, the user can play, vote, purchase, and learn. Internet set-top boxes and web data broadcast synchronized with the TV programs provide this two-way interactivity. The challenge for device manufacturers is to hide the technology from the users who only need to see how it makes their life easier. The challenge for media broadcasters, content and service providers is to agree on common standards and to create innovative programs using the full potential of the technology.

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