Interactive television (ITV) pushed itself into prominence during last months National Association of Broadcasters convention in Las Vegas, with hundreds of exhibitors offering the latest self-proclaimed wonder tools, daily announcements of joint venture deals promising to revolutionize the TV industry, and bullish predictions about take-up rates.
But during several well-attended panel discussions dedicated to the topic, including a four-hour session called Enhanced TV and Interactivity: Driving the Future of Television, the talk centered around how much work needed to be done in mobilizing the industry to start taking ITV seriously, with several speakers issuing a call to action. The most urgent task is getting viewers-who traditionally enjoy TV as a lean-back experience-excited about being able to access entertainment and informational opportunities with the click of the remote control.
ITV ultimately needs to stand the test of consumer acceptance. It is the content, not the technology, that is important. Color TV was great technology, but it wasnt until Bonanza that people actually bought it. We need a similar experience for ITV, said Mitchell Kertzman, president/CEO of San Carlos, Calif.-based Liberate Technologies. Liberate offers services and applications from interactive advertising and gaming to e-mail and enhanced programming. During the session, Kertzman unveiled Liberates enhanced version of Sesame Street which, through a deal with Childrens Television Workshop Online, allows kids and their parents to interact with the popular Sesame Street characters via their TV and a set top box. The demonstration showed kids going on a personalized adventure with Elmo, a monster search and number count, the ability to create music while Ernie sings and a parents icon that appears throughout the show to indicate when related parent content is available after the show.
ITV programming is largely experimental because of the currently low number of people eyeballing it. Pioneering interactive shows include Jeopardy!, Wheel of Fortune and Who Wants to Be a Millionaire. There are compelling economic incentives for advertisers, related Kertzman. There are billions of dollars spent on TV advertising for the purpose of making people remember the brand long enough to buy the product-imagine the power of moving point of sale to the point of contact.
Kertzmans enthusiasm is supported by a report by Cambridge, Mass.-based Forrester Research, which estimates that by 2004, ITV subscribers will number around 24 million, generating $11 billion in advertising and $7 billion in commerce.
In its current context, ITV is a broad term that is used interchangeably with convergence and encompasses anything that extends television beyond the passive viewing experience. The enhancements include basic Internet links which allow enabled viewers to click on a TV screen icon and obtain more information on a product. It also offers programming that lets viewers play director: choosing to watch the halftime show or sports highlights-or for that matter, which ads they want to see. ITV also deploys systems that enable advertisers to track who is watching their ads, injecting a measured form of accountability into the TV advertising market.
ITV and convergence are synonymous, explained Mitch Oscar, senior VP/director of Media Futures, New York, a division of Universal McCann. Its all about converging the activities of the Internet with the passivity of the TV to create an interactive model. We know that the two are going to converge, but we dont know what the landscape will look like.
And while were at an early stage, there are plenty of companies ready to jump on the bandwagon, Oscar continued. Examples of interactivity models currently in the marketplace include the personal video recorders offered by Tivo and Replay; video streaming as offered by Microcast and Digital Connections, Internet through the television such as that offered by WorldGate and WebTV; and enhanced TV such as Wink and RespondTV. By summer, AOL plans to launch America Online TV; the company is expected to be an aggressive player in driving ITV into households.
According to Bud Breheney, VP/advertising at Philadelphia-headquartered WorldGate Communications, the important question is how the technology can reach consumers. WorldGate currently offers enabled cable subscribers to access a full array of Internet services and e-mail via their cable TV sets. The system works through an advanced analog or digital cable box and a remote control or wireless keyboard, which are supplied by participating cable operators. Deployed domestically in cable systems owned by companies including Buckeye CableSystems, Charter Communications, Click!Network, Comcast Cable Communications, Massillon Cable and Prestige Cable, WorldGate said it has trial agreements with 19 multiple system operators in 13 countries around the world. In the interest of driving the technology, it has teamed with cable operator Charter Communications and the City of LaGrange, Ga., to provide free Internet access to all cable TV households in the city.
During NAB, WorldGate announced a joint venture with SeaChange, a Maynard, Mass. company that provides patented software and hardware technologies to automate the management and distribution of videostreams, including ads, movies, news updates and other broadcast quality video programming. As part of the deal, SeaChange will integrate its video-on-demand services with WorldGate, enabling cable TV operators to offer digital subscribers the integrated environment necessary to implement current and future software applications from both companies without the delays associated with compatibility issues.
The thirty-second spot becomes a portal to an interactive session. For example, during a commercial for Oreo, there can be an on-screen prompt which hyperlinks to a screen that gives recipes, said Breheney.
Enticing viewers to leave this programming raises one of the challenges of ITV: Once audience members move on, how do you get them back? It is an issue, said Breheney. Maybe the solution is to only use interactivity during appropriate programming-for example, promoting allergy medicine during the Weather Channel is OK, but during ER, it isnt. Our research has shown that people do go back to the programs. There are people coming and going anyway with zapping on the remote control. There needs to be creative solutions.
In the third quarter of the year, WorldGate is scheduled to kick off a national study into the usage of interactive TV, with a test group of 15,000 homes.
Next week, part two of this story will explore such industry players as Wink Communications, Respond TV and ACTV, as well as prospects and timetables for significant ITV penetration in U.S. households.
