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TIM CLARK
Interactive TV should reap millions of dollars for operators, but just how much operators stand to make remains to be seen.
The Internet has bolstered the notion that consumers like to purchase goods from the comfort of their homes, and panelists at a recent Paul Kagan Interactive TV Summit convinced themselves this same notion can translate to television. Despite rampant enthusiasm, many analysts recognize ITV needs to establish open interfaces and standards in order to target every audience while being non-intrusive and user-friendly at the same time. With these major obstructions, the translation process appears to be far easier said than done.
Kagan estimates the cable industry will generate $728 million in interactive TV revenue this year. ITV revenues will grow to $16.4 billion by 2004 and $33.9 billion by 2010, according to Kagan projections.
However, panelists admitted to being baffled about what exactly will drive those revenues.
"We're not sure what our consumers want," says Keith Bechard, VP-digital products, AT&T Broadband.
Bechard also says ITV business deals vary wildly due to different MSO requirements. He says part of AT&T's future ITV content and business models will be resolved through different test trials.
For instance, the company is considering charging Internet retailers a commission each time a consumer buys a product over the company's telecom broadband network. The program is already in use in Ma Bell's PocketNet service on AT&T's wireless phones.
Should the program be expanded to include its broadband service, each time customers who get cable, high-speed Internet access or local phone service over an AT&T line buy a product online, AT&T would get a cut from the merchant offering the product.
The program might help AT&T generate more fees, but it might chill e-commerce if the terms are too stringent.
Some analysts are beginning to wonder whether interactive services and e-commerce will work on broadband networks because everyone is going to want a piece of the pie.
TV-centric content - as opposed to Web pages on TV - will be key to ITV's acceptance, according to Steve Heeb, Comcast's senior director-new business development.
He believes attention should be paid to what the consumer wants as opposed to what technology can provide.
"The consumer only cares about a value being provided by a service provider," he says.
The majority of U.S. households will have access to interactive television services, and more than 41 million consumers will actively use ITV services by 2005, according to a new study by The Strategis Group.
"ITV has the potential to revolutionize the way we use our televisions - we'll be able to order products, access information, get movies and chat with friends at the click of a remote," says Strategis Group analyst Keith Kennenbeck.
According to a recent survey conducted by Strategis Group, 24% of consumers are very or extremely interested in video-on-demand services. Some 12% of respondents say they're very or extremely interested in t-commerce services.
"This survey data reveals that not all consumers are currently ready to embrace interactive services because ITV has not yet demonstrated its value," says Ty Cottrill of the Strategis Group. "This will change quickly if consumer experiences show interactive television to be a entertaining and useful service."
LIBERATE, RESPONDTV TEAM UP Liberate Technologies and RespondTV have agreed to integrate RespondTV's infrastructure and applications with the Liberate TV Platform software for interactive television applications. Network operators, programmers and their advertiser customers can now take advantage of the combined technologies. RespondTV's infrastructure and applications will enable viewers with set-top boxes running the Liberate TV Platform software to view and interact with enhanced TV advertisements, programming, portals and virtual channels.
ERICSSON, AT&T WIRELESS DEVELOP INTERACTIVE AD Equipment maker Ericsson and AT&T Wireless Group hope consumers will want to watch their ad this week, lured by its interactive element and the promise of $1M. One viewer will win the big bucks during ABC's showing of Who Wants to be a Millionaire by watching their commercial and directing a game device that looks like an Ericsson cell phone toward the television screen. Viewers push a button on the mock phone to find out if they won a prize. The advertisement promotes Ericsson's Internet-enabled mobile phone and AT&T Wireless' Digital Pocket-Net wireless Internet service. The companies sent out about 100,000 game devices Oct. 11 to a random list of prospective AT&T Digital PocketNet service subscribers.
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