ITV Forecasts: Sweet and Sour

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New York— Interactive television is arriving, just not to the point at which tens of millions of households will deploy it in a wide variety of ways beyond using an electronic guide to choose programs.

Sweet and sour visions of when ITV will be available to most cable subscribers were in focus during the ITV Visions conference here last Thursday.

WorldGate Communications Inc. president Gerard Kunkel said he believes the ITV cable marketplace will take off on a grand scale "when Adelphia [Communications Corp.] and Charter [Communications Inc.] and Comcast [Corp.]-AT&T Broadband settle down."

As those cable operators work out their respective financial reporting or — in Comcast's case — merger issues, they will lay the groundwork for mass ITV deployment beyond 2003.

"It won't be next year," Kunkel said. "You will see sandbox activity, with operators rolling ITV out in large markets, adding up to a few million homes. The tens of millions you won't see for a while."

Despite its financial accounting concerns, Charter has made Digeo Inc.'s set of ITV services available to more than 650,000 subscribers. A games package was introduced several weeks ago.

The deployment of two-way broadband infrastructure will "transform TV," Kunkel said. "We're going to a TV world where at any time of day, you get whatever information or entertainment you desire."

WorldGate's research suggests e-mail, chat and games will be the first ITV applications to enjoy mass appeal.

Down the road, ITV's plum will be communications and community services, incorporating instant messaging; commerce applications; voice and image mail; voting and polling; and videophone and educational services.

Panelists who followed Kunkel's keynote address at the Digital Media Wire event were divided about video-on-demand's role in helping consumers adopt to an ITV world.

John Canning, Microsoft Corp.'s eHome technical evangelist, said VOD would make a good transition to more active TV viewing, or "watching non-linear content."

But that won't happen unless cable operators can generate a workable business model from it, ACTV Inc. senior vice president of advertising Art Cohen said.

"When VOD stops being cute, everyone will have to figure out how to pay for this sucker," Cohen said. "Consumers will only pay so much."

Ultimately, cable operators must be convinced that ITV applications are as foolproof in their technology as they are simple and consumer-friendly.

"Operators are very sensitive to doing applications that work 100 percent of the time. They don't want their set-top boxes crashing," said Jonathan Bokor, business development director with ABC's enhanced TV operations. "Also, you have to do things with ITV that haven't been done before, or distill its capabilities in a unique way.

"Look at the Internet — that broke open with services like [online auctioneer] eBay [Inc.]. New ITV directions will launch the marketplace."