iTV Skeptics Miss the Point of Innovation


Apparently those of us who are investing billions of dollars to develop interactive TV are building a technology no one wants.

At least that's the opinion of Robert La Franco, a reporter at Red Herring. La Franco took interactive TV to task recently with the help of researcher Angus Reid Group, and his article caused quite a buzz in the cable, satellite and interactive-TV world.

Most people want their TV to remain stupid, La Franco maintained. Interactive TV is an idea being foisted upon unsuspecting viewers who haven't asked for it. To reach his opinion, La Franco and Angus Reid asked 1,000 consumers whether they wanted interactive TV, and found that only 14 percent of those surveyed thought iTV was very appealing.

That's not unlike asking a secretary in 1950 whether she wanted Post-It Notes. Or asking a housewife in the mid-1800s if she wanted radio. Or asking the business world in 1965 if it wanted Internet access.

The successful technology companies of our distant and recent past didn't wait for consumers to tell them what they wanted. Successful entrepreneurs-from Henry Ford to Bill Gates-have always anticipated consumer desires and needs.

This debate is no different from those found at any other point in history when technology has shifted. When the TV was first introduced, radio pundits maintained it was unnecessary and provided nothing radio and movie theaters weren't already offering. IBM Corp. laughed at RadioShack Corp. when the electronics retailer began marketing home computers.

The short-sighted have produced the notable quotes that spice up business history texts. "There is no reason anyone would want a computer in their home," Ken Olson, president, chairman and founder of Digital Equipment Corp., said in 1977.

And when attorneys for Alexander Graham Bell offered Western Union the patent to the telephone for $100,000, the telegraph operator contemptuously turned it down. "This 'telephone' has too many shortcomings to be seriously considered as a means of communication," said an internal company memo written in 1876.

Imagine life today without Post-It Notes or Fed Ex deliveries. But no one was asking for either of them. Fred Smith's professor at Yale University called the student's idea for Federal Express Corp. unfeasible and market research indicated no one would use overnight delivery. Ditto: no one knew they wanted Post-It Notes, but once a 3M engineer created them from research on a new adhesive, few administrative assistants could work without them.

Neither should the merits of a product or service be judged by past failures of early iterations. If failure were the reason to not pursue technology, we'd still be living in caves and painting pictures on the walls with sticks.

In this vein, Mr. La Franco calls Time Warner's experiment with iTV in Orlando "disastrous." But such "disasters" aren't the end of a technology's path. Until the Orlando experiment took place, we (the interactive-TV community) didn't know what level of technology we would need to make iTV successful. We didn't know how much bandwidth we'd need, what software we wanted or what a set-top box should be able to do.

We left that experience saying, "Wow, this is going to take a lot of horsepower." That's learning, not failure.

I, for one, don't want TV to remain dumb, and I don't think it will. Already, anyone with youngsters in the house knows they are going to interact with the TV more than today's adults do. I have an 8-year-old who wouldn't understand how to use TV without an electronic programming guide (EPG).

Today's kids are natural multi-taskers. They watch MTV: Music Television and simultaneously rate the performers on their PCs. They play Monopoly and card games, laughing at the top of their lungs-all with their favorite TV programs running in the background.

The absolute "have-to-have-it" technology that, like the VCR, will catapult iTV into ubiquity may not have been developed yet. But some technologies already have started to stick. The EPG is one.

Today, there is so much content available that one must have a means to navigate it-other than surfing though all 100 channels with the remote control or laboring through printed guides that often require a magnifying glass to read. You can't go back and do without EPG once you've experienced it as an avid TV viewer. And TiVo's video-caching technology and replay capabilities have caught on, especially with the younger population.

Among the iTV applications we believe are most likely to lead us into interactivity are those in which the interactive storyline complements the video storyline, rather than competing with it. Programs that are participatory and competitive, such as game shows, sporting events and award shows, are far better candidates for interactivity than those that require viewer immersion, such as Law and Order.

Destination-based iTV sites will also be quite popular, provided that are designed to accommodate the television's unique characteristics. Simply slapping Web pages on a TV screen has already proven to be a non-starter for the iTV market.

And we believe that information-intensive programming will bring data-like services to our TV sets. We expect customizable tickers-with weather, sports, stock quotes and news-to be quickly accepted. Further down the road, food, history, science, home and garden shows will be augmented with additional information that viewers can send to a printer, download to their computers or read immediately within the borders of a downsized video screen.

Some of TV's new "smarts" will be attached to more passive experiences as well. With the proliferation of channels and content, even the passive viewer will be taking advantage of electronic-program guides and program timeshifting. And a viewer who wants to enjoy a movie or a TV sitcom without touching a remote control may not think he's interacting. But on the delivery end, the commercials sent his way may be the result of the cable system's interaction with demographic data.

Is this targeting a bad thing? La Franco certainly seems to believe it is. But it seems to us that if Ford can spend less money by being able to target the audiences most likely to buy its trucks, that will mean more money for its employees, or its stockholders. Or lower prices for its trucks.

Further, the consumer who wants to buy that Ford will benefit from finding out which dealership is close to him-and won't have to read the fine print of all 25 locations as they quickly scroll by on his TV screen. The ability to more closely target neighborhoods will also open the door for mom-and-pops who must now cede the power of TV marketing to franchises and national chains that can afford to buy entire SMSAs on broadcast stations or cable systems.

It's easy to knock holes in work on the leading edge. But in 10 years, predictions of the early demise of interactive TV will look as silly as those of the IBM executives who forecast that PCs would go nowhere.

Joel Hassell is CEO of Intello-city USA.