With walled gardens
of interactive services popping up across the UK, left, right and centre, thanks
to the likes of BSkyB, Telewest and NTL, it appears that when compared to America,
the British are winning the race to launch interactive services and the Americans
are lagging.
Forrester Research recently stated that there were more than six million iDTV
households in the UK. Telewest alone, has 126 interactive service providers
at last count, making it the largest in the world. Meanwhile, back at the ranch,
maybe three million consumers can access Wink and perhaps a million others can
log on to rudimentary interactive services through services like WebTV, while
there are somewhere in the neighbourhoud of nine million digital STBs in deployment.
While single services are being launched in America with VOD constantly trialing
in one system or another and interactive advertising slowly starting to emerge,
the British are being offered suites of services.
A recent interview with SeaChange International's Yvette Gordon, helps to explain
why. Gordon is SeaChange's vice president of interactive technologies. She was
also the lead engineer on Time Warner Cable's ill-fated Full Service Network
interactive experiment in Florida.
The constantly delayed late rollout of interactive services in North America
results from many different factors. To begin with Britain and much of Europe
have benefited from the fact that the majority of their cable systems are new.
They haven't had to tumble and tussle with the constant problem of upgrading
their plant, headends and delivery pipe the way North American systems have.
And finally, just on a population basis, it is easier to rollout services to
a geograpically close population of 55 million, than to rollout services to
a widespread 330 million.
"Ten years ago," said Gordon, "we were all focused on upgrading our plants to
750 MHz and doing HFC upgrades. For the last five years it has been getting
digital set top boxes out there for digital broadcast and now the focus is on
digital broadcast, digital broadcast and digital broadcast."
Now, Gordon says, the emphasis is on VOD and middleware. "Interactive television
can be broken into two main pieces right now and I think both of them are being
take very seriously. MSOs have been putting a very serious push on middleware
for the low-end set top boxes because there are so many of them out there. Right
now enabling that platform is very much the focus." Motorola alone has roughly
eight million low end boxes deployed in the United States and another million
or so high end boxes in deployment.
Liberate was first off the bat in launching a middleware solution for low end
set tops with its Liberate PopTV Variety Pack for the Motorola DCT 2000 and
now has an installed base of 100,000 through Insight Communications. OpenTV
is working on a low-end solution which it should be launching soon.
"For VOD, much of the focus is the business modelling. I think operators realise
that VOD is definitely the first logical revenue opportunity for the digital
set top. I don't think there is any question of that. Right now the focus is
how to get the content licensing rights so that it can really be launched wide
scale."
Almost every major MSO in the United States has launched VOD, says Gordon, "Now
it's all about how the marketing is going to be done, how is the programming
going to work and to try and get the studios to try and commit to different
aspects of VOD programming." If last year's VOD trials were being conducted
in remote suburbs, this year's launches are being conducted in major markets.
Future aspects of on-demand programming which need to be worked out include
the PVR option and time switched or on demand programming. While these concepts
have very enthusiastic supporters, they do after all ring the chimes of the
interactive mantra, what you want when you want it, the business model still
needs to be worked out, and that, according to Gordon will take some time to
do.
"Real time shifted programming will take years. Think about it. If you were
the CEO of NBC and you are faced with 'how do you charge for advertising and
licensing rights to your content?' you could have the potential of putting yourself
out of business by creating the wrong business model and getting it wrong. Something
like that is going to take a long time."
Gordon's predictions for the next little while are that one year down the road
VOD will be more solidified as a business model and that middleware will really
have made its mark. Then the decisions will be made as to which interactive
applications and businesses will be launched, how middleware and VOD will be
used. "Now it's just movies but there's a lot more you can do with it so two
years down the road the industry will focus on how to use this platform that
we have spent all this time building."
Assuming that VOD and middleware hit the market successfully this year Gordon
believes that the American focus will once more be split in two. The first consists
of different interactive applications that stand on their own and the second
is the development of integrated services between the middleware and the STB.
The ability to solve the riddle of what happens if I am watching broadcast TV,
switch to an on-demand ad, stay too long in the ad and miss part of the program.
How do I watch the programming I missed?
Gordon likes the European and British approach to launching advanced services.
She likes the aggressive nature of launching digital, on-demand and interactive
services at the same time. "I am a big fan of that approach. There are two different
marketing thoughts attached to that. If the customer is going to give something
a new look and say, 'am I going to want this,' it would be much more exciting
to have everything at once rather than have these services come slowly and I
tend to agree with that from marketing standpoint. I think that would be more
churn-resistant compared to what we have in the United States.
