Bill and Rupert's big adventure

Since the first cable company disrupted the traffic flow in the early 1980s and the first Sky dishes started mushrooming around the country, the broadcasting industry has changed beyond recognition.

But if the past 15 years have been characterised by increased choice and an attendant willingness to pay for it, telecoms companies globally are now set to gamble billions on the idea that viewers will in future choose to receive television down their telephone line.

It is a battle that will pit Rupert Murdoch's News Corp - which has a formidable lead in pay-TV by investing in satellite technology - against Bill Gates' Microsoft. The pair have fundamentally different outlooks on the way television will evolve in the next decade. Murdoch, who has a sizeable head start, remains convinced that consumers will continue to pay a dedicated pay TV company to provide for all their viewing needs, attracted by exclusive content and technological advances such as Sky Plus-style personal video recorders and high definition pictures.

But Gates is equally adamant that the future lies in IPTV - television delivered over broadband internet lines to a set-top box, DVD player, PC or games console attached to the set. He has wasted billions since 1992 trying to break into broadcasting and anticipating the convergence of home entertainment devices. But Microsoft now senses this could be its moment to break into the industry.

Analysts predict around 26m households globally will have IPTV subscriptions by 2008, around 4.5m of them in Europe. But thereafter, the technology is expected to grow more quickly as prices come down and broadband speeds continue to rise.

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