Cable operators moving into the digital age have a new way
to keep their brand names in front of subscribers on a regular basis -- by controlling the
video portal that leads subscribers through the maze of video programming, Internet
content and interactive services delivered to the TV.
Over time, video portals may command more attention from
marketers than Internet portals do now, for several reasons.
More Americans watch TV than own home personal computers.
The average cable customer tends to spend more time watching TV than surfing the Web at
home. And while consumers needn't stay faithful to a single Internet portal, cable
operators offering digital services can dictate the first screen that subscribers see on
Keeping control of that first screen can help operators to
influence where viewers go next, whether it's to video-on-demand movies,
revenue-generating electronic-commerce transactions or e-mail messages promoting a new
bundled offer from the MSO.
"Only one-third of households are even connected to
the Internet," said Hal Krisbergh, chairman and CEO of WorldGate Communications Inc.
"Clearly, one of the most potent [portal] landscapes is the TV."
Krisbergh added that while home computers are on only 45
minutes per day in the average PC household, TVs are on seven-and-a-half hours each day.
Devoted television viewers represent a more captive
audience for advertisers. Krisbergh said that if advertisers pay 35 cents for each online
ad that a subscriber clicks through to, and if an interactive-TV household clicks on just
two ads every day, that could add up to $21 per month in revenues -- more than some
operators take in for basic cable.
A number of services are vying for a foothold -- or
outright dominance -- in the potentially lucrative TV-portal category.
Among them are electronic-programming-guide suppliers TV
Guide Inc. and Gemstar International Group Ltd.; TV-based Internet services from At Home
Corp., Microsoft Corp.'s WebTV Networks and WorldGate; and new interactive services like
those from Replay Networks Inc. and Wink Communications Inc.
While several such services can coexist on a given cable
system, it's up to the cable operator to determine which screen the consumer sees first.
"It's a business-strategy issue, although many
suppliers will try to position it as a technology issue," said Art Bassin, president
and CEO of TVData, which delivers TV programming information via its Web site (www.clicktv.com).
"Technology is not what matters," Bassin added.
"What matters is the cable operator's ability to maintain its relationship with its
customer in a branded fashion."
Peter C. Boylan III, chairman and CEO of TV Guide
Entertainment Group, believes that the EPG will become the dominant TV portal, even if
operators offer a choice of entry points in the beginning, because the EPG is the obvious
starting point for consumers.
TV Guide's interactive guide is quickly becoming more of a
portal than a stand-alone EPG, Boylan said.
The company plans to offer links to other services, such as
VOD, e-mail, TV-oriented chat rooms and e-commerce sites.
It will also feature advertising directly related to the
different genres of programming on its guide, although Boylan said TV Guide plans to limit
the amount of ad clutter.
Steve Shannon, vice president of Replay Networks, predicted
that over the next three to four years, viewers will watch TV stored on hard drives,
rather than live over the air or over cable. Because of that, the user-interface of choice
will shift over time, as viewers gravitate to the screen that shows them the content that
they can see on demand.
Others believe that a more traditional EPG will serve as a
starting point for whatever interactive services follow.
"We believe that cable TV is poised to be the ultimate
portal for entertainment programming," said John Reed, president of Source Media
Inc., because it can provide both television and data over the same remote control.
Reed believes that the on-screen guide will be equivalent
to a search engine as cable continues to offer more programming and interactive choices.
Later this year, At Home's @Home Network will offer a
TV-based high-speed Internet service with its own take on the portal.
"Customers won't have that same freedom to change the
first screen the way that they can in the PC world," said Adam Grosser, vice
president of product development for @Home.
On its first screen, @Home will offer viewers the option of
an EPG or an interactive-services menu; one-half of the screen will be devoted to video
programming. According to Grosser, the screen will default to the last television channel
seen unless the viewer selects something else within a given amount of time.
Like TV Guide and WorldGate, @Home will offer cable
operators the ability to co-brand the first screen that a subscriber sees.
"This is a great opportunity for cable operators to
really define a positive image to their customers," Grosser said. "They can
create a link between the high-tech world and cable."
A good job of branding can help to drive consumer
acceptance, advertising levels and e-commerce opportunities, according to Mitch Berman,
senior vice president of marketing and operations for OpenTV Inc.
Berman added that it's critical for operators to brand
themselves in the digital world so that their customers will know whom they're doing
Cable customers who don't believe in the brand that they
subscribe to may be reluctant to use their credit card for online purchases, Berman said.
TV portals represent not only a marketing opportunity, but
also a marketing challenge for operators that are new to the digital arena. One viewer's
search engine is another's source of frustration unless operators can successfully train
every new digital subscriber on the ins and outs of the TV portal.
"You have to have very good marketing to help
consumers learn how to use the electronic programming guide," Berman said, and that
means backing it up with customer-service agents who are prepared to answer subscribers'
questions if they become confused.
"We're talking about changing consumer habits,"
Berman added, "and changing consumer television habits doesn't happen