Oh, gentle couch potato, you don’t know how lucky you are. What wonders the years ahead hold for you.
In the not-too-distant future, you’ll be able to lean back in your favorite sofa, a keyboard in your lap and a television across the room. The keyboard will work like your TV remote control. It will allow you to turn on the tube and tune in your favorite program.
And if your favorite show just doesn’t grab you this week, you can use the remote to access the Internet and, say, check your e-mail on your television screen.
However, the direct response television industry hopes you will do more than that. Its rosy vision of interactive television sounds like a direct marketer’s dream.
Here, you will be happily engrossed in a long- or short-form DRTV spot. If you want more information – or, better yet, want to place an order – you can use the remote to access the Web site with one click, since the spot is linked to the site.
The enabling technology and basic legislation are here. Microsoft Corp. has invested millions in a form of interactive television it calls WebTV.
Part of the reason why is that interactive television has two rival technologies: one using the Internet service provider (ISP) model – think America Online – and the other using the cable television operator model.
Ben Mendelsohn, the head of Internet operations at Williams Worldwide, Santa Monica, CA, says that interactive television technology started out to be a way to read “computer-based information” on a television monitor. He claims the results “looked fuzzy.”
As the concept and the technology improved, Microsoft developed a WebTV network and content. The WebTV connection could now be in the set itself, instead of in a set-top cable-type box. And the television itself could now offer two screens, not just of two stations, as has been available for many years, but of a station and a Web site. The couch potato could now toggle between the two media using the same hardware at whim and at will.
“They’re putting Windows CE into the boxes,” Mendelsohn says. “As the hardware melds together, the Web box disappears into the set but the channel remains.”
Describing, if not dismissing, that as “transitional technology,” Mendelsohn goes on to point out that true digital television – or high-definition television (HDTV) – will be the “convergence platform” for the two media.
“HDTV is out there,” he says, “but it’s very expensive and there’s not enough programming to take advantage of it.”
Mendelsohn predicts the price will drop within two to three years. And in terms of programming, subscribers to Microsoft’s subsidiary, WebTV Networks Inc., already get enhanced interactive television features with selected programming from NBC, HBO, Columbia Tristar Television, Big Ticket Television, Discovery Channel, Home & Garden Television, E! Entertainment Television, MacNeil/Lehrer Productions, The Learning Channel and The Weather Channel, plus such special features as voice and fax messaging services (through eFax.com).
“There’s a problem developing hardware no one knows about,” says Tyee’s president and CEO Spencer Brown. “When Philips’ WebTV was launched in the fall of 1997, it was marketed in traditional 30-second spots. The WebTV boxes gathered dust on retail shelves, since the sales staff at Circuit City or Best Buys didn’t know what interactive television was all about.”
Not that consumers didn’t need to be educated about the benefits of interactive television as well, Brown notes. “It allows people without computers to access the Internet via television as simply as possible.”
He suggests that the equivalent is the PalmPilot, which, he claims, provides a simple calendar and address-book solution for people who need or want it.
“WebTV is the same sort of application,” Brown says. “It doesn’t require that a customer spend thousands on a computer.”
To market WebTV to consumers, the Portland, OR-based DRTV agency explains benefits of the set-top box to drive retail sales. (The box is connected to a phone jack and to the television set.) Brown describes the market as “mothers, fathers, grandparents – people who are not necessarily computer literate or have a need to use a computer.”
Currently, Microsoft’s WebTV has some 70% of the market. Brown also points out that WebTV appeals to people who don’t want a computer – for whatever reason – but are comfortable with television appliances as the main Internet portal.
“It’s a kitchen device to allow people a port to access the Internet,” he says.
Brown also sees great potential for direct marketers with interactive television in general and WebTV in particular. What he delicately describes as the growing “disenchantment with online advertising” – that is, the sense that banner ads don’t work – may drive advertisers back to television as the best mainstream medium to reach an audience. Television spots (ads or infomercials) will then steer consumers to brick-and-mortar or click-and-order stores.
“The combination [that could result in] true convergence is mass media to niche media,” Brown observes.
A Compelling Model
The ISP model of interactive television is compelling enough that Japan’s CSK Corp. is using it to develop a set-top Web box based on Sega Dreamcast computer gaming technology.
In addition, Intel Corp. and Nokia Oji have joined forces to make set-top boxes for interactive television to run on the Linux operating system (and will likely use a Mozilla Web browser). Both plans, of course, avoid using any Microsoft software or technology.
Scott Campbell of WorldGate Communications Inc., Trevose, PA, an interactive television provider that developed Internet access over the cable television infrastructure, says that his company sells both the technology and the service to cable systems operators. The cable ops then market the service to their customers.
Instead of being in a WebTV box on top of the television set, the motherboard (the unit’s main logic board) is in the head end of the cable system, organizing the system as a multiserver environment. In other words, the cable head functions as a high-powered computer while the television sets become dumb terminals. The centralized architecture takes the complexity out of the home.
However, the consumer still has access to both television and the Internet and can tune in or log on with a few strokes on his or her wireless keyboard.
According to Campbell, there are almost a dozen such systems up and running in the United States and perhaps over a dozen in the rest of the world. The raw numbers are low. Worldgate has less than 10,000 subscribers, but is growing rapidly. (Estimates for WebTV are much higher, but currently are still under 1 million.)
WorldGate is now running a survey of subscribers in Ohio to ascertain usage and preference. A limited telephone survey conducted earlier in St. Louis found that 55% used interactive TV to surf the Web and 45% used it to send and receive e-mail.
In contrast, David Florence, the president of DraftWorldwide in New York, questions whether interactive television will be anything but marginal.
“Television is basically passive while the Internet is active. You’re asking the consumer to switch back and forth between active and passive,” he says, suggesting that the consumer is more likely to do one or the other, but not move from one to the other, let alone for the benefit of direct marketers.
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