Inching into interactivity, Source Media touts a low-cost bridge to digital

At a time when digital technology is so tantalizingly close for cable operators but still just out of reach, Dallas-based interactive programming developer Source Media believes it's found a bridge - a way for cable operators to offer digital-like services without the digital price tag.

The Interactive Channel is an interactive programming network that allows cable operators to deliver on-demand news, home shopping and other programming to the TV set via analog or digital systems.

While regular programming is delivered by broadcasting 30 frames of video per second down the cable plant, The Interactive Channel's technology allows the headend to address frames to a particular subscriber, sending them downstream to either a set-top sidecar or a digital set-top box equipped with an Internet Channel chip. The consumer uses a remote control to request information; the upstream signals can be sent either over the telephone network or over the cable network if the system has been upgraded to two-way.

The Interactive Channel requires the cable operator to give up the bandwidth required for one broadcast channel. In exchange, the operator will be able to deliver a wide range of services such as on-demand local and national news, sports and weather; educational programming, including access to homework assignments at local schools; interactive television programming guides; catalog shopping; interactive games; interactive traffic updates; and a version of e-mail.

In addition, The Interactive Channel has a new feature that allows every cable network to add a interactive aspect. The ChannelLink feature bridges cable channels and their respective Web sites, allowing viewers to toggle back and forth between the two.

"All of the top cable networks have Web sites that they have developed at considerable expense," said John Reed, president of The Interactive Channel. "And each one winces every time they run their Web address on the television because of the likelihood that some of their subscribers will turn off the television and log onto the PC.

Court TV is the first network to take advantage of the Interactive Channel's capabilities, delivering a "sister channel" called The Court TV BackChannel that provides supplemental information such as case summaries, bios, recent verdicts and the network's programming schedule.

On the cable operator side, Century Communications launched the Interactive Channel over its analog system last summer in Colorado Springs, Colo., and Cablevision Systems recently announced that it will deploy the next generation of the service later this year.

The cost to the cable operator is relatively low, given the return on the investment, Reed said. The Interactive Channel provides the digital file servers required for the headend and fronts the cost of the set-top sidecars and remote controls, which the operator repays out of its monthly revenues.

The payoff for the operator is at least three additional revenue streams: the $6.95 monthly subscriber fee, advertising fees and transactional fees for services such as home shopping. In addition, operators can use the service to differentiate themselves as new competitors come into the market.

"There's a new era of consumer choice in the cable industry, which means that cable operators want differentiations to distinguish their product in the marketplace," Reed said. "Against that backdrop, we're offering a solution for them to do that with a dramatically expanded way to use the television."