Delivering the keynote address to the Consumer Electronics Show in Las Vegas, Bill Gates highlighted Microsoft’s initiatives in internet protocol television.

Giving over a significant proportion of his keynote speech to developments in television, the chairman of Microsoft said: “The set-top boxes that have been connected up to cable can take a new generation of hardware and software and be far better.”

“There’s a generation that can go even further as we get more video on-demand capability and literally anybody can watch any show at any time, even the ads can be targeted to you.”

With many references to IPTV, he said “no doubt this is where the world is going” and “it’s a great way to think about the integrated scenarios, video, data and voice actually coming together.”

He admitted that “We’ve been investing in software for the TV probably for longer than we should have.” After significant investment in the field for over a decade, Microsoft’s strategy may be beginning to pay off, with deals announced not only with Comcast but also telephone operators developing next generation networks.

He took the opportunity to add that Bell South was among the companies that will be rolling out services using Microsoft TV software.

Demonstrating the significance of the sector to Microsoft, Bill Gates handed over part of his keynote platform to Lea Ann Champion of SBC. In addition to offering video services, she said “it’s about combining voice, video and data”.

A key feature, often emphasised by Microsoft, is instant channel change. “You can say goodbye to the two-second lag that you have today when you have a digital broadcast television experience,” she said.

She observed that IPTV allowed every television in the home to take advantage of digital video recording facilities: “No longer do you just have one television with DVR but it’s a whole house DVR experience.” In addition, video-on-demand services will include “not just only movies and videos but also television news programs and other entertainment shows”.

The SBC executive invited the audience to “stop and think for just a second about the possibilities that develop when you take the capabilities of this software and a two-way interactive broadband connection, and that’s when you start seeing things take shape”.

Giving a demonstration of a baseball game, she suggested “with IPTV the user will have the ability to control and to actually be able to preview and see multiple events or games at one time,” adding “sports will never be the same in this next generation of TV viewing”.

She went on to demonstrate the integration of mobile services, showing how a mobile phone could be used to programme a digital video recorder. Referring to a couple of technical glitches that had been evident earlier in the keynote, she pointed out that all of the live demonstrations had actually worked.

Bill Gates concluded the segment by saying that the consumer market is very demanding: “It will have to be cheap, it will have to be simple, it will have to be things that catch on and have great word of mouth, but I think we can see here in 2005 that this is the decade it’s coming together.”

Interactive television, at least from the Microsoft perspective, is not a separate technology, but a feature of the convergence of consumer communication in which it appears determined to play a leading role.