a Business at Last?
a boost from cable, the pieces finally are falling into
We've waited and
We've waited long
years for interactive television to become a real
business in the United States.
interactive TV pass through successive boom and bust
cycles. As each bubble burst and capital withdrew from
"iTV" ventures, we've seen the critics close in like
vultures. Interactive TV has been dead and buried more
times than Boris Karloff. Yet the spirit keeps arising
"If we look at the
growth curve for interactive TV from Winky Dink in the
1950s to Gold Pocket today," says cable industry
researcher Gary Arlen, the president of Arlen
Communications, "we see each wave ends higher on the
keeps improving as it becomes more affordable, so iTV no
longer costs more than it earns.
operators are now taking iTV more seriously than ever
because of its success in Europe, especially in the U.K.
The skeptics fairly
argue, of course, that Europe isn't the U.S.
Granted, people in
Europe have a long tradition of going to the TV screen
for Teletext information, while people in the U.S. have
now adjusted to visiting a PC screen for information.
best iTV offerings have been deployed on more capable
boxes than those in the U.S.
adopted the open Multimedia Home Platform (MHP) standard
for interactive content on any set-top box in a DVB
network, regardless of manufacturer, and this happened
while iTV development in the U.S. was delayed by open
competition among incompatible proprietary solutions for
the set-top middleware.
allows iTV gaming, while any TV-related gambling has been
deemed unacceptable in the U.S.
But even with these
differences and more &endash; even with NTL's failure in
the U.K. -- the overall uptake in Europe undeniably
proves the market for iTV. Now, it's facing another
resurrection in the U.S.
Small wonder: The
pieces finally are falling into place.
After a $75-billion
investment, the U.S. cable plant has been largely rebuilt
over the last few years. With digital services available
to more than 80% of the nation's TV households, cable has
attracted 20 million digital subscribers.
The digital boxes
now deployed aren't as advanced as some may wish, but the
installed base is large enough to build a business on. By
adopting more open standards such as OCAP and XML,
producers can at last create iTV content once and then
see it played anywhere.
developments, the financial balancing act between
development and deployment at last looks favorable for
iTV. Consequently, we haven't seen such hope for the
concept in this country since Barry Diller married the
television, telephone and computer into the magic
money-making machine of home shopping.
Will the 21st
Century's first decade begin the iTV era in the U.S.?
Will cable operators soon be rolling out advanced
services that go beyond electronic program guides and
video-on-demand? Will cable make its move before
satellite operators flip a switch for full-bore
nationwide iTV services?
that interactive TV is going to be big," says analyst
Paul Kagan of Kagan Capital Management, "but it's coming
together later than we thought. It's happening in bits
and pieces, creeping into our lives."
Kagan expects three
to five years to pass before iTV services in the U.S.
reach the levels of interactivity already available in
Europe. "We're now waiting for the last contractual
pieces to fall into place, the carriage deals between the
networks and content providers, but it's coming," he
For the U.S to
match iTV's European success, "we'd first have to see the
prices become more affordable," says Sean Badding, the
president and senior analyst at The Carmel Group. "Then,
we'd have to see more applications targeting specific
interest groups. And these applications would have to be
more intuitive, providing a more customized or
personalized feel for each consumer."
The delusion still
plaguing cable, Arlen warns, is a belief there will be
one "killer application" that puts iTV over the top. In
reality, success will hinge on a wide range of offerings
that appeal to different markets. "We tend to think in
terms of what's already been done, but these services may
be things we can't even imagine yet," he
that interactive cable TV will happen in the U.S.," says
Gary Lauder, managing partner of Lauder Partners, which
invests in new media ventures and funds. "What oscillates
back and forth is public opinion and the pundits' views
about the options for interactive TV, and for TV in
general. What doesn't change is a tendency to offer
So, is interactive
TV in the U.S. a business, at last?
December 2003 in premier of Transmit
2003 by Ken