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Guest Commentary: Interactive TV is here

Dec 3, 2001  •  Post A Comment

EchoStar, the home satellite TV service, is spending $26 billion to merge with its No. 1 rival, DirecTV. Comcast and AOL Time Warner are reportedly offering billions of dollars for AT&T’s cable TV division.
And at last week’s Western Cable Show, companies ranging from Microsoft to Motorola announced they are seeking partners to develop new digital entertainment services.
There hasn’t been so much “hooking up” in the entertainment world since Russell Crowe made the post-Oscar party scene.
So why are the nation’s largest media companies coming together?
Two words: interactive TV.
The companies that control the delivery of TV signals stand to generate billions in new revenue from interactive TV services. Cable and satellite TV operators are now rolling out interactive services across the country, and Forrester Research, a business research firm in Cambridge, Mass., predicts that interactive TV will be in 40 million homes by 2005.
Some Wall Street analysts said that is a conservative estimate, thanks to terrorist jitters and the economic recession.
“What do you do in a recession? You sit at home and watch TV, smoke cigarettes and drink beer,” said Randy Scherago, an analyst at Prudential Securities. “If you have the choice of ordering pizza on the TV, which you do with interactive TV, you do it.”
But here’s the punch line. As the industry prepares for this “interactive TV revolution,” no one seems to know exactly what interactive TV is. The term is tossed around to describe dozens of services, from Web streaming on PCs to video games on all platforms. The morphing definition has caused considerable confusion in the marketplace.
For example, AT&T recently selected Liberate Technologies to market interactive TV services to 200 of its cable TV affiliates. Liberate’s menu includes everything from an electronic programming guide to video-on-demand. However, one multiple system operator was quoted in a trade magazine as saying he wasn’t interested in interactive TV. Why? He would rather offer his customers “digital video services,” such as … video-on-demand.
In this space, I want to offer my definition of interactive TV. It is based on the premise that an ITV feature is one that gives you more entertainment or control if you interact with your TV. It’s that simple. The definition does not include PC-based services, HDTV (which does not require any interaction; you just watch) or anything else that does not include some interaction with your television.
So what is interactive TV?
* T-commerce: With the click of the remote, t-commerce services from companies such as Wink and OpenTV permit viewers to purchase and order information about products, including those seen in TV shows. For example, the networks are gearing up to sell you skirts, shirts and coats similar to those worn by your favorite stars on shows such as “Ally McBeal” and “Friends.”
* Enhanced television: Want to play along with your favorite game show or change the camera angle during a sporting event? Enhanced television, which is provided by such companies as ACTV and Mixed Signals Technologies, allows the viewer to virtually get into the game. You have the option to participate in or change what you see on your screen.
* Personal video recording: The PVR, from TiVo, ReplayTV and other companies, permits you to pause live TV, record dozens of hours without a videotape and skip commercials. You are in control over what you watch and when.
* Video-on-demand: Many cable TV operators have added or will soon add a video-on-demand service to their lineups. You can order a film from dozens of new releases and watch it immediately. It’s like having a video store in your TV-minus the rewind fees and out-of-stock films. Unlike pay-per-view, you have total control over when you watch the film.
* Internet TV: Services such as MSN TV (formerly WebTV) and AOL TV permit viewers to surf the Net and retrieve their e-mail on TV. The concept has stalled because of slow connections, but Internet TV services are expected to upgrade to broadband in the next few years.
* TV chat: AOL TV enables two or more viewers to chat on-screen while they watch the same program. Similar to AOL’s “Buddy Chat,” it’s not hard to imagine that TV chat could become a popular pastime for flirting singles. Sex-obsessed shows like “Temptation Island” could become online TV hubs for the romantically adventurous.
* Electronic programming guide: The on-screen electronic programming guide allows you to search TV listings for hundreds of channels. And you can search by actor, genre or title. For example, do you want to see a list of every Eddie Murphy film that will air during the next two weeks? With a few clicks of the remote, it’s yours. Just be careful of “Holy Man,” OK?
Phillip Swann is president and publisher of TVPredictions.com, which offers daily news updates and analysis on the future of television, and the author of “TV dot COM: The Future of Interactive Television.”