OpenTV Corp.'s acquisition of Static 2358 Holdings Ltd., a London-based streaming-media and games company, could give the company the asset it needs to crack the U.S. cable market.
OpenTV has been providing interactive-TV platforms for operators around the world. But the $49 million Static purchase completed last week enables the company to offer MSOs a way to make money by offering interactive games and other content, says Alec Livingstone, OpenTV's SVP-technology.
Although OpenTV's platform has been mainly linked to advanced set-top boxes, Livingstone says the technology is being tested in Half Moon Bay, Calif., using the more basic DCT-2000 boxes from Motorola. Among the applications being tested on that system are games from Static, he adds.
The Static deal gives OpenTV PlayJam, an ITV entertainment and games channel that is currently in more than 9 million digital homes in Europe via BSkyB, NTL, Telewest, TPS and Canal Satellite. PlayJam also currently runs on several ITV platforms, including those provided by OpenTV, Vivendi's Canal Plus Technologies and Liberate.
Static's content includes arcade-style action games, trivia, word puzzles and games of skill such as golf and darts. The channel generates a recurring revenue stream for OpenTV and cable operators via premium-rate telephone calls that allow players to compete for prizes, via ads placed on the games themsleves and via branded game sponsorships.
Interactive games have become increasingly popular among European TV viewers. From May 21 to June 10, PlayJam users spent on average 33 minute per session on Sky playing games, compared to 25 minutes watching MTV, 22 minutes watching VH1 and 49 minutes with UK Gold, according to Broadcasters Audience Research Board data supplied by OpenTV.
In addition to its game channel, Static also provides broadcast design services that assist TV networks in strengthening their brands, according to Livingstone. Broadcast design services clients include Channel Four, The Disney Channel, FilmFour, Star TV, Sky and Universal Studio Networks.
OpenTV expects the Static deal to appeal to operators in the U.S., where the company has had little success to date. OpenTV software has been shipped with or installed in 16 million digital set-top boxes worldwide and has been selected by 43 digital-cable, satellite and terrestrial communications networks in more than 50 countries, including the U.K., France, Germany, Spain and Italy. The company has also cut deals with DirecTV in Latin America and EchoStar's Dish Network. But only USA Media in Half Moon Bay has agreed to test the system on its cable system here so far.
Why has the U.S. market been so hard to crack?
?European operators faced more competition earlier on, and they were basically forced into making the leap [into interactive TV] earlier to compete better,? Livingston says.
?U.S. operators had less need to take the risk,? he adds. ?Now, we're helping them build business models that show that they can make money from day one not just make the service sticky.?
But part of that equation means having product to sell. Advanced boxes in Europe allow users to do a variety of things that U.S. boxes can't yet. For instance, Livingstone says, SkyTV users have access to multiple camera views of Wimbledon tennis action, and the network doesn't even have to advertise that feature because users are so used to ITV that many take the option for granted now.
?You have to have something that people can interact with and that's what we're trying to do with acquisitions like Static,? Livingstone says. ?We have guys that are good at building infrastructures, and Static has guys that are good at making things that people want to watch and play with. Together it's an extraordinary combination.?
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