Tower

Interactive TV

Trade Reports by Judah Ken Freed

Interactive television is a reality. Here's the story.

.

Logo
MEDIA
VISIONS

Journal
The Business Case
for Interactive TV
by Ken Freed.
.
The iTV boom in the UK and Europe proves the market. Now the question is what to do about it.
 

Walking the exhibit floor at Cable2000 reveals enthusiasm for interactive television. The catalog for the National Cable Television Association annual show lists more than 250 vendors selling interactive TV hardware, software and content. Does this mean the dream of "iTV" is a reality at last?

Yes and no. Ask a different question. Is anyone today making money from interactive TV? Where and how?

In the past, according to Liberate Technologies president and CEO Mitchell Kertzman, "Interactive TV was too expensive to be feasible." A broadband digital infrastructure was not yet constructed. There were not enough iTV applications. There was not enough content. There were no common iTV standards. And most vital of all, there were no viable business models.

Today the situation is reversed, he said. A digital infrastructure is now in place. Digital set-top boxes are finally at the right price. Interactive TV development tools from third parties are available. Content creators are producing interactive programming. There are open standards (e.g., HTML, TCP/IP, ATVEF, DOCSIS, OpenCable, DVB-MHP) competing for adoption. And there are working business models in Europe for Americans to emulate.

In the early Nineties, Kertzman recalled, it took months or years to produce proprietary applications and content for the interactive TV tests and trials. Developers today using Internet tools can do the very same things in days or weeks, at a fraction of the cost.

Nothing is cut and dried, however, for the industry is evolving.

Liberate is backed by Oracle and allied with Microsoft and Intel in the Advanced Television Enhancement Forum (ATVEF), the trade coalition developing and promoting a PC-centric operating standard for interactive TV. American ATVEF is competing with Europe's Digital Video Broadcasting Multimedia Home Platform (DVB-HMP), a TV-centric approach to interactive television.

"No matter how much we might pontificate about a particular technology," Kertzman said, "everything must stand the test of consumer acceptance. And the reality is that consumers do not really care about technology. All they care about is content, what they see on their TV screens.

"That's why our highest priority today needs to be providing the compelling interactive content that gets consumers to use the new technologies," he added. "Thinking about how to make money from this interactive content adds a whole new dimension to television rights and carriage negotiations."

As an example, he pointed at the interactive programming on digital TV services in the UK, such as the show, "Supermarket Sweep," which has enjoyed a 70 percent increase in viewership since the interactive elements were introduced. Increasing the audience raises the CPM (cost per thousand) for advertising rates, and it creates opportunities for collateral marketing.

Liberate's ATVEF-compliant middeware will support aggressive marketing to AOL customers of Time-Warner's interactive TV service, now called "AOL-TV." So, customers will keep their AOL usernames on the new iTV service, which will ease adoption of electronic commerce over the TV -- dubbed "T-Commerce" by financial analyst Larry Marcus and others.

"Interactive television is going to happen with you, or it's going to happen to you," cautioned Kertzman, " If you do not use the infrastructure of the web for your interactive television services, your competitors will. It's your choice.

"Your competitors will walk all over you unless you learn how to make interactive TV pay off for you," echoed Jimmy Schaeffer, president of the Carmel Group, a consultancy specializing in the direct broadcast satellite (DBS) industry. "Cable is stepping up to digital, because if they don't, given the growth of digital satellite services, they will die."

DBS and cable are about neck and neck in terms of U.S. digital customers, now past 10 million each, but DBS keeps signing up new digital subscribers faster than cable, and this trend scares the cable industry. However, DBS does not have an easy road ahead, for its worse enemy may be itself.

Without discussing the animosity and lawsuites between DirecTV, Echostar and the satellite trade association, Schaeffer conceded that cable has an edge over the DBS industry in the realm of regulatory affairs. "The NCTA and NAB have more success in Washington than the DBS industry because of the unity within the cable and terrestrial broadcast communities."

Yet Schaeffer is quick to warn against overoptimism by cable or anyone else. "People may say it will be this way or that way," he said, "but they are wrong. The interactive television marketplace will have many winners, not just one. Consumers want the ability to choose among service providers, and in a world where all of the interactive TV delivery platforms share an Internet backbone, it all comes down to choice. Convergence is only a click away."

The most vital trend in the evolution of interactive multimedia services, he asserted, is the change in attitude within the entire digital television industry from a realization that they can make money from interactive TV. "Whether you are talking about cable, satellite, ADSL, fixed wireless, or any other platform, enhanced and interactive TV services will forever change the television business."

Now consider the world according to OpenTV, which has one million interactive TV subscribers on 20 services worldwide, mostly in the UK through the "Open..." service on SkyDigital from BSkyB and on the TPS satellite service in France. OpenTV launches this year on Echostar's Dish Network in the USA with an initial weather-on demand application. OpenTV currently is being ported to Motorola's (GI) digital cable platform.

"There are now more than 6 million digital television receivers deployed in the world," said OpenTV president and CEO Jan Steenkamp. "While only a small percentage of the one billion-plus TV households worldwide, the market is growing steadily." Datamonitor predicts 67 million digital TV subscribers on all platforms by 2003, he said, and Forrester Research predicts that 80 percent of all European households will have interactive TV services by 2010.

The DVB-based "Open..." iTV system in the UK is generating $1.6 million (USD) in revenues every week, Steenkamp reported, this expected to reach $20 billion annually by 2004. These revenues break down to $11 billion from advertising, $7 billion from T-commerce, and $2 billion from subscriptions. The potential for iTV is indicated by SkyDigital's home banking service attracting about 400 new customers every day.

"Demonstrating the business case for interactive TV is harder than with the other forms of mass media because all the nascent platforms are still proving their viability," said IXL president Ken Papagan, who's guiding the Internet e-commerce developer into the iTV business. "The ones who do not understand the potential of interactive TV are the ones who will be left behind." end
.

Extra Extra!
First Published in EXTRA EXTRA at NCTA 2000. Revised.
(c) 2000 by Judah Ken Freed


Media Visions Journal will always be free to read, but the site is not free to produce. Please help sustain my independent publishing.
NOTE: Business and educational publications may be tax deductible.

.


Global Sense (Cover)

Please read Global Sense by Judah Freed
An update of Common Sense for these times that try our souls.
Kagi

.

Global Credit Cards

Euro Card


. 

.

MEDIA VISIONS

Global Sense Book
Global Sense Blog
Media Reports Blog
Journalism
Podcasts

About Judah Freed
Speaking
Consulting
Coaching
Workshops
TeleSeminars
Reiki

Subscribe
Send Email
Search Site
Site Menu
Home Page

Hitmakers Summit

 

MEDIA VISIONS

Global Sense Book
Global Sense Blog
Media Reports Blog
Journalism
Podcasts

About Judah Freed
Speaking
Consulting
Coaching
Workshops
TeleSeminars
Reiki

Subscribe
Send Email
Search Site
Site Menu
Home Page

Sell Your TV Concept Now

 


WRITINGS

global Sense
Global Sense Blog
Writing
Book
Blog
Journalism
Global Sense Book Cover
Global Sense
Book Excerpts
Media Trade Reports
News Commentary
TV Reports Archive
Personal Growth
Media & Education
Empowerment
Opinion Essays
Observations
Colorado Stories
Colorado
Visionary Voices
Events
Network Democracy

PODCASTS

Podcasting
Radio & Podcasts
KGNU "Metro"
Talk Show
Every 1st, 3rd,
& 5th Wednesday
Interviews of Judah
Public Talks
Thin Air Stories
More Pending

PROFESSIONAL SERVICES
Judah Freed
Consulting
Workshops
Book Publishing
Global Sense
Going Green
Going Green
New Media
Pending
Speaking
Coaching
Reiki
Keynotes
Individual
Healing
Conferences
Groups
Training
Seminars
Writer's Block
Support
Trainings
Book Coach
denver reiki master teacher
TeleSeminars
Going Green
Pending
Quit Smoking
NEWS HEADLINES
CENSORED NEWS

Subscribe to the
Media Visions News eLetter
Occasional News and Views with Website Updates


.

Judah Freed - Political Issues Examiner

Judah Freed - Media Industry Examiner

Website Masthead
Website Awards
Website Press Room
Link Exchange & Advertising
CONTACT JUDAH FREED: SEND EMAIL

Media Visions Journal..

. . Google Search Site Search Web


MEDIA VISIONS IS A SPARE-TIME EDUCATIONAL PROJECT
Media Visions Journal | Copyright 1997-2009 by Kenneth Judah Freed - All Rights Reserved

Last update: 30 JANUARY 2009

Return to Top of Page

 

 

 

.