Craig Mundi, the chief research and strategy officer for Microsoft, has admitted that the lack of early progress in interactive broadband television was a disappointment. Only now is it slowly starting to become a successor to traditional television. However, he said online advertising supported media is now becoming a modern surrogate for free-to-air networks.

In an interview with Computerworld, the man now responsible for the long-term strategic direction of Microsoft was asked if he had ever been disappointed in a technology that did not take off as well as expected.

“One of the biggest areas I championed in my early years here in the early 1990s was interactive broadband television,” he said. “We had many of the ideas, perfected a lot of the technology in the ’90s, and we’re sitting here in 2009 just starting to see a significant global ramp-up of that as a successor to traditional television.”

He said that it has been a disappointment that many of the things necessary to make that happen, such as broadband network penetration and performance, have lagged so far behind globally, especially in the United States.

So the big screen experience is in many cases not being delivered over a packet switched network that enables interactivity and two-way communication. “That’s what I call full-tilt-boogie IP TV, and it’s still ultimately the solution that people will come to use,” he said.

Meanwhile, many people are using personal computers as media playback devices and “we’re starting to see people seeking that kind of network entertainment experience, delivered on demand and over the network.”

The Microsoft executive said that “All the major networks in the United States are free over the air all the time, yet very few Americans watch them because the experience isn’t very good”.

He neglected to mention that Microsoft has made little impression in that market with its own Windows Media Center solution, now integrated in every copy of Vista Home Premium edition.

With access to media over the internet, he observed “There’s no limit on shelf space, you can have as much differentiation as you want, there’s no rigorous timetable that you have to watch in prime time.”

He said that many of the things that people want in their entertainment experience can now be delivered “over the top” of existing internet protocol networks, adding: “I think of it as the contemporary surrogate for free-to-air television.”

While Microsoft will spend $9 billion on research and development this year, after more than three decades it has really yet to crack the consumer entertainment market.