A formal announcement to this effect will be made soon, sources close to the company said. Discovery channel will be able to produce and deliver interactive content over digital networks with the help of NDS technology.The agreement, however, will initially be confined to the UK operations. If Discovery finds the interactive service adding to its eyeballs and revenue, it will extend to some other parts of the world.

Launched late last year, NDS is already providing the interactive backbone for BSkyB's Sky Sports. Viewers can select their preferred camera angle, choose a 30-second replay, watch the match highlights and access a wealth of statistics and match facts while watching the live broadcast.

Though Murdoch is using the interactive service for his sports channel in the UK, the technology has potential in gaining popularity in areas like home shopping channels and children's programming. Said Simon Hughes, business development manager, NDS, "Sports is the most important piece of content for Sky. Which is why Murdoch is promoting interactivity in sports broadcasts in the UK. But home shopping, banking and kids programming are prospective areas of interactive TV growth."

Interactive TV, Hughes said, would become a major engine in driving the success of digital television for consumers and broadcasters. "After the introduction of NDS software, BskyB is earning a revenue of one million pounds a week from electronic retailers. The interactivity in the Sports Active sports coverage will add enormously to armchair sports fans' enjoyment of football through the coming season by putting the consumer in charge of the viewing experience," he added.

NDS is talking to domestic manufacturers of set-top boxes to offer flexible solutions. Besides, Hughes expects Doordarshan to be a potential customer as the public broadcaster plans to introduce digital terrestrial television broadcasting. Broadcasters in the interactive era will have to "re-purpose" content which can be shared between the three mediums - television, Internet and radio.

Interactive TV will create another stream of programming and ad revenue for broadcasters as customers move away from passive viewing, Hughes said. Besides, there will be scope for targeted advertising.

NDS on Wednesday launched XTV, an extended TV platform, in the country. XTV extends the TV experience for broadcasters, advertisers, content owners and viewers by placing large amounts of digital storage into the set-top-box or digital TV set.