Spearheaded by Matsushita Electric Industrial Co. Ltd., Toshiba Corp., Sony Corp. and Hitachi Ltd., ePF Network Corp. will develop the e-Platform, which will comprise a set-top-box (the eSTB) with a hard drive for storing digital-TV (DTV) content and a modem for Internet access. Once fully defined, the platform will support DTV-based services from the new company.

Matsushita and Toshiba each hold 25 percent stakes in the venture; Sony and Hitachi each hold 10 percent shares. The remaining 30 percent is held by 10 companies, including private TV broadcasters here. The venture will formally kick off its activities Nov. 15 with an initial capital investment of 200 million yen (approximately $1.84 million) and with Matsushita's Chosaku Toda as its president.

The standard being pursued by ePF may be limited to use in Japan because of differences among the dominant international data broadcast formats. Japan uses the Broadcast Markup Language (BML), Europe has selected MHEG, and the United States has yet to settle on a standard datacast approach. It thus will be difficult to take the full e-Platform to overseas markets, a Matsushita executive said, although its upper software layer will be internationally applicable.

Standard specifications being pursued for the eSTB include the hard-drive file system, the data storage format and the copy protection scheme. Draft specs have already been prepared, the Matsushita executive said.

The set-top standard is expected to specify a 30- to 40-Gbyte hard drive and a modem with an initial speed of 36.6 kbits/second. "With data provided in combination with stored data, users won't feel it's slow," Toda said, adding that keeping the cost low is a factor in the determination of the initial modem speed.

The hard drive will be partitioned into a service provider section, which will store broadcast data, and a user section, which will store 7 to 8 hours of standard-definition digital TV programming. A remote controller, rather than a keyboard, will be used to control all operations.

Beyond standardizing the set-top platform, ePF Network will establish e-Platform services and promote both the set-top and services as a business. The company will organize two working groups: One, chaired by Toshiba, will develop and prepare common frames for services; the other, chaired by Matsushita, will direct technology development and standardization.

The company is slated to change its operation from a planning entity to a revenue-generating business by the spring and to begin services at the end of next year. Services will include the eMall (shopping), e-mail, information, music/video distribution and i-mode connection via the e-Platform.

"To establish a business, 5 percent market penetration, which is about 3 million users in Japan, will be the first hurdle," Toda said. "We've learned from past experience in market development that when a new product is introduced, once the 5 percent hurdle is cleared, penetration grows to the 10 percent level in a short time."

The e-Platform project was announced this summer by Matsushita, Toshiba and Sony. Hitachi was subsequently invited to take a major shareholder's stake to get ePF Network off the ground.

The presidents of the founding companies said leveraging the virtual ubiquity of the TV is key to the planned platform. Toshiba president Tadashi Okamura likened e-Platform to a "Japanese-style Information Superhighway. It will be Japan's first comprehensive platform on which all media will be handled. It is an open platform that invites participation from various industries."

But Sony, a founding promoter of the e-Platform concept, has scaled back its level of investment and participation in the new company. "We will work on the unified standard," said president Kunitake Ando. "We want to connect audio and video to network using TV as the core as early as possible. But it's alright that there are various routes to climb up to the common platform. Whether we will provide service through this company is another story."

For Sony, Ando said, "The largest merit of ePF is that four companies can collaborate to unify specifications, including those for copy protection technology. We can define the specification together but compete with each other on the platform."

Participating companies other than the four major shareholders are Asahi National Broadcasting Co. Ltd., Dents Inc., Fuji Television Network Inc., Japan Satellite Broadcasting Inc., Nippon Television Network Corp., Sky Perfect Communications Inc., Sumitomo Corp., Television Tokyo Channel 12 Ltd., Tokyo Broadcasting Systems Inc. and Tohokushinsha Film Corp. Others will be invited to join as the business expands, the founders said.