Forbes hosted a panel discussion at the National Association of Broadcasters Conference on April 15, 2008. Participating companies included Alcatel-Lucent, Microsoft Mediaroom, Forrester Research, and IP Prime
Interactive TV Rises Again,
Pushed On by IPTV
By James L. McQuivey, Ph.D.,
Vice President & Principal Analyst, Forrester Research, Inc.
Forrester Research is an independent research firm that produces objective, high-quality analysis of technology markets.
Television industry strategists are again whispering the once disgraced term “interactive TV.” What failed in expensive tests that go back as many as 30 years is now poised to come to fruition, thanks to advances in technology and changes in consumer behavior.
In the past year, a phoenix has been rising from the interactive TV ashes in the form of:
Games. NDS has deployed branded interactive TV games that are offered to players while viewing specific TV shows, such as Scooby-Doo, with partners that include BSkyB and Bell ExpressVu. NDS strategists also have plans to bring similar games to the U.S. market soon. When the viewer agrees to play a game, the platform superimposes or pushes the program to one side, helping programmers keep their ratings and, importantly, preserving advertisement playback. Typical plays can last 20 minutes, keeping channel-surfing to a minimum.
Sports trackers. Time Warner Cable launched Biap’s Fantasy Sports Trackers, which give viewers the chance to select a fantasy roster of players. The system automatically updates the display as games in the real world generate player and team performance data. It also delivers news items related to the players on the roster. The trackers can be displayed full-screen, through a scrolling ticker or via customizable alerts.
Information inserts. Subscribers to Verizon’s FiOS TV service can view local weather forecasts and traffic alerts with the push of a button, and the company is expected to announce more of these interactive widgets as it ramps up its subscriber base. These visual information tidbits push the television image up so that the information occupies but does not obscure the bottom of the screen.
Communication tools. Integra5 has deployed a platform that allows users to view incoming caller-ID notices, text messages, news alerts and voice-mail management options over the TV screen. The company boasts about a dozen midsize service providers, which serve roughly a million homes offering this tool.
Polling. Ensequence strategists announced last summer that the company would enable a set of interactive features for EchoStar Satellite’s DISH Network viewers of the Bravo network’s third season of Top Chef in Miami. For the first time, viewers were able to vote on which aspiring chefs should “pack their knives” each episode, as well as answer trivia questions and explore food facts.
This budding interactivity is surprising given that in the early part of this decade, many people claimed that the Internet’s superior interactivity obviated the need for interactive TV. The opposite is true. Ironically, interactive TV has the Internet to thank for its second act because the Net: 1) taught consumers how to use graphical interfaces; 2) built a broadband superhighway to 52% of consumers’ doors; 3) reminded viewers how much they like TV; and 4) showed marketers that advertising is relevant despite the decline of the mass audience.
As the largest systems integrator of IPTV solutions around the world, Alcatel-Lucent has for some time been breaking new ground in IPTV rollouts, with more than 50 deployments around the globe. “We began many, many years ago in close cooperation with Microsoft to start seeding the market for the potential of IPTV that we see entering the market today,” says CMO John Giere.
Recently, the company has been busy developing key applications using Microsoft’s Mediaroom platform, allowing carriers to include powerful end-to-end solutions, including Triple Play and mobile offerings, as well as personalized advertising, as part of their service offerings.
Giere notes that the beauty of an IPTV experience is that it allows that connectivity to be more intuitive and span across communications, Web and entertainment platforms. “Coming from a telecom background, it’s important to remember that IPTV is a real-time delivery environment that makes our expertise in supporting the management of a high-quality consumer experience a critical factor for success. Concurrently, we are attracting and cultivating a vibrant industry ecosystem throughout the end-to-end IPTV value chain, including the ability to insert and deliver traditional advertising at the speed of light,” he notes.
All the activity so far has taught us that, when given a chance, consumers will interact with TV in ways that will deepen their relationship with content and service providers. But consumers taught how to interact on the Internet will often be sadly disappointed when they try to experience the same kind of interactivity on a television set-top box. These interactive experiences are either too slow, too limited or both to satisfy an Internet-trained viewer. That’s where IPTV comes in.
IPTV, or Internet-Protocol TV, refers to a relatively new system for delivering TV and related services into people’s homes. It is exactly what it sounds like: Namely, it uses Internet technology to deliver TV into viewers’ homes. IPTV takes advantage of a high-speed Internet connection to send only the channels viewers request rather than delivering all channels simultaneously, the way cable and satellite do.
If IPTV were only this — an efficient TV delivery mechanism — we wouldn’t be writing about it or holding special conference tracks about it. Instead, the most important contribution IPTV makes is in its potential for increased interactivity. Because content is delivered via Internet Protocol, it can be tailored to the tastes of individual households very easily, just the way Internet content can be personalized. This means the potential exists for more effective advertising placement, as well as the layering of critical information on top of the video image in response to user requests.
This is why all the fuss about IPTV and why technology companies big and small are working hard to provide IPTV technologies to telcos around the world, like AT&T U-Verse, Deutsche Telekom and many others. On the list of competitors is Microsoft Mediaroom, a division of the software giant that has set its sights on providing the operating system of future TV technology in partnership with Alcatel-Lucent, a telecom equipment provider and services integrator. Offering services to small and midsize network operators are companies like IP-PRIME®, a service of SES AMERICOM, providing turnkey IPTV solutions to operators that want to catch up and compete quickly.
Many other vendors are working furiously on other parts of the IPTV puzzle, including providing the servers needed to stream video channels, video-on-demand (VOD) servers, conditional access management and encryption for copyright protection.
We’re watching an industry being born. Cable and satellite can and will respond with their own mechanisms for delivering equally flexible interactive programming and services. It will take some time and money because their systems were not designed from the ground up for interactivity. But they will do it — indeed, most of the examples cited above involve cable and satellite providers already engaging in limited trials of these functions. In the end, every TV service provider will eventually have an interactive TV platform, and the victor will be determined on the basis of who can serve the customer the best at the lowest price. That’s exactly the way consumers should want it.
Satellite company SES AMERICOM has become a major player in the IPTV game through IP-PRIME, an end-to-end solution that enables operators to compete effectively in a marketplace where consumers expect rich and engaging programming.
Offering flawless picture quality and superior reliability, IP-PRIME is an open platform … able to deliver current and future content initiatives, including gaming and interactivity.
“We developed IP-PRIME to meet the demands of consumers who know what they want in their video experience, now and in the future. Today, we offer stunning MPEG-4, high-definition TV and reliable delivery. In the near future, IP-PRIME operators will choose from a menu of hundreds of HD and SD channels, international programming for ethnic programming, music, plus gaming and dozens of interactive applications — optimizing the IP backbone,” notes IP-PRIME President Bill Squadron. “And we are working with an innovative technology company, PacketVision, on a targeted ad insertion capability.
“Effectively, we expect to achieve that long-tail theory that people have been talking about for a long time,” Squadron says.