GoldPocket Cuts Through ITV Clutter

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Start-up GoldPocket Interactive — armed with $55 million in venture capital, additional funding from AOL Time Warner Inc., a unique software and network structure and some friends in high places — has entered the crowded interactive-software field.

The company is already powering the interactivity behind two cable TV programs, Dinner & A Movie
on TBS Superstation and Home Box Office's On the Record with Bob Costas. But its plans are more ambitious.

GoldPocket has also built a national distribution system, which can handle up to 2 million interactive sessions and as many as 50,000 simultaneous users, according to company president and CEO Scott Newnam.

The heart of GoldPocket's technology is its EventMatrix software, which allows content producers to create interactive applications — such as content sharing, playing games or chat — whether it's for news, sports, entertainment, games, music or talk programming.

The applications function irrespective of an end user's bandwidth-connection speed, Newnam said.

The software application sports real-time data replication, global and local hardware load balancing and multiserver synchronization.

But GoldPocket's software is only one piece of the puzzle. The other key element is the company's nationwide content-distribution network.

That "private" network includes six points of presence, 70 Compaq Computer Corp. 8500 servers and 14 gigabits per second of cumulative, dedicated bandwidth through 12 OC-3 lines.

GoldPocket's technology employs intelligent routing to handle simultaneous interactive access by 50,000 users across the country, Newnam said.

The nationwide network gives GoldPocket greater control over the interactive end-user experience enabled by its EventMatrix software, so users don't go away feeling cheated.

Most companies faced with problems of scale think to add more servers for their popular Web sites, according to Newman. But widescale interactivity presents new problems.

"You can't just add servers," explained Newnam, who argues that software and bandwidth must also be bolstered.

"That's a huge complexity," he added. "You need enormous processing power for interactivity."

Compaq, Foundry Networks, Microsoft Corp., Data Return Corp., Level 3 Communications and AboveNet helped GoldPocket to build its nationwide network.

Though Newnam wouldn't disclose the cost of building out GoldPocket's network, he did say that the company got price breaks on high-end equipment.

"And the AOL investment validates the strength of the platform," he added.

In addition to the proprietary infrastructure, GoldPocket's Management Framework software helps to route traffic through the fastest points of presence on the network.

GoldPocket has also inked two-way traffic deals with "all the major backbone providers" and "preferred access agreements to get packets out first," said Newnam. "We're not in shared router banks."

The company also writes its own Internet protocols, which are faster, thinner and more intelligently routed than other protocols, Newnam said.

TBS Superstation launched its GoldPocket-enabled companion Web site for Dinner & A Movie
in March. The idea behind the site was to "roadblock" the consumer's viewing experience using both the TV and Internet, said network director of interactive marketing Richard Turner.

"Traffic [for Enhanced Dinner & a Movie] is on par with some of the other enhanced TV sites we've done," Turner added, referring to the Superstation's four-year "CyberBond" effort. That's James Bond.

Powered by Macromedia Inc.'s Shockwave software, the Dinner & A Movie
site offers rich-media content, recipies and information on that week's feature film, as well as interactive elements and instant-messaging features.

"What really resonates with our audience is exclusive information," such as commentary from the on-air hosts, said Turner.

Once GoldPocket creates the application shell for Dinner & A Movie, "everything is pretty much automated," Turner added. The network sends a batch of fresh content each week, including text information delivered prior to its Friday night run date.

GoldPocket synchronizes the site's features with the taped broadcast and plugs the content into the show for the two-screen experience.

"It then gets deployed on the network around the country," Newnam said.

HBO's On the Record
— a live, interactive telecast — presented a different challenge for GoldPocket. Throughout the show, a producer relays questions from the program's Internet audience to Costas.

Costas also periodically polls Web site users and reports the results — almost instantaneously — while still on the air.

"HBO was a very different application because it was completely live," Newnam said. "Everything changes based on what the guests were saying. We needed to pump an audio stream over the Internet that had to match the TV signal."

GoldPocket achieved its goal of transmitting the interactive content in three seconds or less, he said.

"That, by far, showed more functionality than any show in history."

After Costas completes the on-air show, he moves to a PC to take questions from Web-site visitors for 15 to 30 minutes after the show signs off.

Newnam expects to ink more content deals in the next few months, as more programmers look to add interactivity to their shows.

Advertisers are also starting to use interactive applications in a different way, he said. In a world of personal video recorders, consumers will have the ability to skip over traditional commercials.

Wary of this potential trend, consumer-goods companies and other advertisers want to embed their messages in the actual TV programs themselves, according to Newnam — and there's a place there for interactivity.

For instance, online chat sessions concurrent to a TV broadcast could stop channel surfing, come commercial time.

"Real estate also was very important," Newnam said. "When you add a PC screen, you add more real estate" in which marketers can place messages.

An automobile advertiser, for instance, might run a TV commercial during Dinner & A Movie, then ask a question on the PC screen while the commercial is running, he said.

A question such as "How long do you keep your car?" is a quick, free way to obtain focus-group-type research, Newnam said.

Multiplatform TV/PC ads also could allow viewers to obtain a coupon or get more information about local car dealers.

GoldPocket is also reaching into the set-top space. Last month, the company signed a deal to bring its software to PowerTV Inc.'s set-top boxes. The company built a platform-neutral back-end system that can work with PCs, set-tops, gaming devices or other hardware, according to Newnam.

Newnam predicts two types of set-tops in the ITV space: Internet-enabled devices, such as AOL TV and Microsoft's Ultimate TV, and boxes leased out by cable operators.

There are three means by which GoldPocket could integrate its interactivity into cable-set tops, according to Newnam: through the IP network via advanced set-top DOCIS Modems; through the placement of software code in PowerTV or another operating system residing in the box; or by downloading an application from the headend to the set-top, so when a viewer changes the channel to a show that is GoldPocket-enabled, the interactive functions appear automatically.

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