Interactive TV Tries Again

Enter the words “interactive TV” into the Telephony search engine and you are as likely to find a story from 1999 or 2003 as one from 2008. The idea of making television more than a lean-back experience has been around for some time, but interactive applications have yet to take hold. WebTV, the technology Microsoft acquired and renamed MSN TV, actually still exists as a product, but its thin-client, keyboard and service approach never really caught on.

What is catching on today is a diverse set of applications that each service provider is developing on its own to knit together video offerings with Internet content and deliver more information, entertainment and choices to viewers. Even in cases where telcos and cable companies are using similar standards, such as Enhanced Binary Interchange Format (EBIF), they are developing their own unique products.

Common themes also are emerging: Consumers want some Internet-type content and services on their TV but not a replication of the Internet and, above all, they want it to be simple.

What interactivity has yet to become, however, is profitable. Most video services are using information “widgets” and services such as caller ID on the TV to differentiate their offerings and retain customers, not charge them more. That is expected to change, especially when interactive advertising hits the market.

There are signs interactivity is catching on with consumers, who already are using widgets that display personalized news, sports, weather and other information on the TV screen. In a January survey of adult broadband users in the U.S., The Diffusion Group found that 76% believed having a widget toolbar on their primary TV would be valuable. Nearly 30% called it extremely valuable, and only 11% were negative about the prospect. And these respondents all were more than 18 years old, reacting to a concept thought to be most desirable to the younger generation. This overwhelming support is rare for new features and apps — consumers just seem to get the widget concept, said Michael Greeson, president of TDG.

The widget movement started in proprietary implementations but now is expanding. Verizon is ready to take its widget platform beyond the standard personalized sports, traffic, stock and weather information for its FiOS TV service this month, and AT&T's U-verse platform has had similar apps available via its U-bar menu for some time now. Cox Communications is providing access to a broad variety of information apps — such as weather, sports scores, news, movie listings, horoscopes and more — in addition to displaying incoming phone calls and e-mails on the TV screen, and it is now upgrading those applications to a tru2way approach.

But even as widgets become popular, there isn't a standard approach to doing them. TDG learned from its study that there is no clear industry definition of a “widget.” Asking a pure technology player, a software vendor, a hardware vendor and an operator likely will elicit four different responses, Greeson said. But when it comes down to how a consumer views the technology and what they want from it, there was one common thread: The best widgets are those that leverage the power of the Web but do not replicate it.

Consumers remain most focused on TV viewing, TDG found. The most popular features, ranking above 75% of consumer respondents, were purely about TV viewing, including finding current seasons of TV shows missed or those to be re-watched. Second was the ability to find and watch online TV programs from major networks, including NBC, CBS and HBO. Up-to-the-minute weather information customized by location came in third, while the ability to watch TV programs that are no longer on the air was fourth. Tied for fifth were both real-time breaking news stories of interest aggregated behind a CNN-style widget and a customized program guide to recommend TV shows by a user's interests.

“Out of 26 apps tested, the top six were TV-based apps,” Greeson said. “They are not even apps that have a thing to do with Internet content, but they are features the Internet uniquely enables. The power of the Internet to create a customized program guide will blow your mind. It's unbelievable.”

Features such as eBay and Twitter, commonly thought to be appealing on the TV, were way down on the list. Consumers did want access to their photos, music or real-time traffic information, but they wanted it to be simple above anything else — a conclusion that Verizon's beta trials echoed. All other applications finished below 50% in terms of their appeal.

The results of TDG's study indicated that the pay-TV providers should walk before they run. The first batch of interactive apps they deliver need to focus on simplifying and enhancing the TV-viewing experience, making it easy for consumers to find and watch their favorite programs. Most of all, providers need to abandon the idea of replicating the Web on the TV.

“It's not that people want the complexity of the Internet on their TV,” Greeson said. “They don't want complexity; they want the benefits. They could give a damn about technology. They don't want the Internet dumped on their TV. They don't want URLs and browsers and that garbage.”

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