Cable Insiders Weigh In on ITV's Promise

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Interactive television continues to capture the attention of cable operators, programmers and technology vendors, but it's not yet clear how quickly consumers will adopt ITV, or which applications they'll be drawn to.

On the eve of the Cable & Telecommunications Association for Marketing Summit, scheduled for San Francisco this week, Multichannel News marketing editor Monica Hogan polled various industry executives to get their takes on the most promising ITV applications. The executives were also asked how quickly those applications would be widely deployed and what cable marketers can do to help facilitate smooth rollouts.

Here are their responses:

Char Beales, president, CTAM:

CTAM research shows that the top three interactive-television applications in consumers' minds are the interactive programming guide, video-on-demand and personal video recorders, although video-on-demand and PVRs are essentially tied.

They're easier for consumers to understand — they can get the concept. For a lot of the other applications, people can't envision them yet.

I think VOD will be deployed over the next two to three years.

The time frame for the PVR is less clear. It's all tied up with the operators' business models. A lot depends on how popular PVRs are with DirecTV.

I think VOD will be a relatively easy product to market. Operators understand the value of barker channels from their experience with pay-per-view. And consumers understand VOD [from their experience with PPV or in-room hotel VOD services.

For VOD, it doesn't take as much education as other interactive television applications.

Gene Falk, senior vice president, Showtime digital media group:

Subscription VOD would be my answer [for the most-promising ITV application]. It is the ultimate in subscriber choice and convenience. It allows people to see the things they're most interested in watching, when they want to watch it; it allows you to program your own television network.

There's still a huge demand for premium product. Having the ability to see what you want when you want will be huge. From a pricing point of view, the control will be well worth whatever incremental cost the consumer will be paying.

We think this will be an incredibly powerful application both for consumers and for operators who want to deploy digital technology.

How soon this is widely deployed will depend on the outcome of operators' tests. If the early research proves true, operators can choose SVOD as one of the first applications to roll out on the platform.

Movie-based VOD is moving a bit slower than people had hoped. We have a service like that, so we think operators will go forward with SVOD.

One of the areas the operators need to be most cognizant of is how they handle SVOD pricing. Don't just look at the revenues from any individual SVOD service, but how it affects the entire premium base. Don't cannibalize a $10 revenue stream to get $5.

Also, the faster we can agree on technical standards, the faster we can move forward with consumer deployments.

Sean Bratches, executive vice president of affiliate sales, ESPN:

For ITV in the broader sense, the killer application will be VOD.

ESPN won't be the killer app within that killer app, but we'll be active in introducing product to support VOD. ESPN has the largest sports library in the world.

My advice for operators in deploying VOD is to leverage core brands and leverage audiences that have a higher propensity to order and pay for programming.

Nancy McGee, acting senior vice president of marketing, AT&T Broadband:

We know that our customers are interested in video-on-demand, with movies as the most compelling content. The service builds on the choice and convenience of our current impulse PPV offering. However, we could see great consumer interest in premium- and basic-cable programming offered in a VOD environment. We'll be exploring options on all fronts to create the most compelling VOD experience for the customer.

Timing [of a mass-market adoption] is always difficult to predict when looking at new technologies. We want to offer VOD with other basic interactive features, like [electronic mail] and news tickers. To make it happen, we must get middleware into the box. We are working on it now, but we need to take the required time to do it right.

Marketing needs to represent the customer during service deployment, making sure that the service meets expectations and is a fair value for the price. Marketing also has to make the early communication to the customer clear and compelling to drive interest, sales and retention.

Kevin Cohen, senior vice president and general manager, interactive/enhanced television, Turner Network Sales:

One-screen enhanced television [is the most promising application]. Easy access to additional, interesting content is appealing to consumers, and it is also a relatively easy service to sell and market.

With approximately 3.5 million set-tops receiving enhanced TV, phase one is already taking place via companies like Wink [Communications Inc.]. Wider deployment will depend upon both the growth of consumer acceptance and the level of operator commitment to enhanced TV.

It is working internationally. For example, the BBC [British Broadcasting Co.] recently announced that 1 million viewers in the United Kingdom watched their enhanced broadcast of Wimbledon.

The industry should study consumer gravitation to particular enhanced TV features on low-end, set-top boxes. This knowledge will assist the development and deployment of more advanced enhanced TV content as higher-end boxes are deployed in the future. In addition, operators will need to weigh the commitment of extra bandwidth for enhanced TV against the ability to drive consumer demand for digital services.

Maggie Wilderotter, president, Wink Communications Inc.:

Wink's enhanced broadcast service is now delivered to 4 million homes, generating 2.3 million viewer clicks per week on enhanced programming and hundreds of thousands of clicks on interactive ads in homes across America.

Our product suite, which creates a one-to-one relationship with customers and a simple direct-response mechanism, is a killer app for television and for commerce.

Jillaina Wachendorf, senior vice president of affiliate marketing, Starz Encore Group:

At the moment, anything that does the auto provisioning is the most important thing, whereby consumers can take advantage of impulse buys. Through our tests with CommerceTV [Corp.], viewers can go to the mall site and subscribe, on their TV, to our premium service for a trial period.

It's hard to speculate how soon this will be widely deployed. There will be a large period of testing and getting things up and running. Middleware companies need to interface with billing systems from operators and with the set-top box. Maybe the next six months to a year is the period when folks will be working through the trials.

If they prove successful, there wouldn't be a reason why operators wouldn't want to roll this out widely.

Operators' traditional methods for consumer upgrades are facing hurdles. Telemarketing has always been a pretty effective tactic, but with 'don't-call' lists, that's getting harder. And operators are trying to manage the times a single household is contacted, especially now that they're pitching multiple services.

We, along with our partners, are trying to find nontraditional ways to touch the customer and get them to react to an impulse.

Maggie Bellville, CEO, Incanta Inc.:

Cable operators are saying they've got a wonderfully rich experience on TV, and wonder where they can go to create a richer, deeper experience for their customers. They're looking at how to make their broadband pipe more than just a speed pipe for their customers. They want to create value-added applications like learning and music and e-commerce, and partner with programmers to create content for the PC to complement what's going on at the TV. They can create a ricochet effect of cross-promotion between the two screens.

Rick Lang, vice president of product marketing, Charter Communications:

For us, the most immediate interactive application with the most potential is VOD. From the consumer standpoint, to have content on-demand is huge, versus the other paradigm, when you ordered a movie and then had any kind of interruption, it was too bad.

This really delivers on the digital promise in a way that our competitors can't.

We should have VOD available to approaching 40 percent of our customer base by year-end, and, hopefully, completing that rollout by year-end 2002. We now have it deployed in six markets in various stages of launch.

With the SVOD model, we're really just scratching the surface with a children's block of library titles sold on a monthly basis.

Marketing should work very closely with the operational people to make sure the services are working properly. They should promote this to show people how to get into the interactive guides. It's pretty intuitive once they do it.

What's resonating most with the consumer is the VCR controls that VOD provides. Once you tell them they have control over the viewing experience, they get it.

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