C2K rings in new mediaNCTA's Cable 2000 show focuses on the Internet and interactive TV 5/07/2000 08:00:00 PM Eastern
New media" may be a buzz phrase that is already wearing as thin as "Generation Y," but that isn't going to stop it from steamrolling across NCTA's Cable 2000 show this week in New Orleans. After already conquering the Consumer Electronics Show and the NAB convention last month, "new media'' need a new victim. The impact will be felt in nearly every booth in the Big Easy.
Content providers will need to show operators that their programming services will offer interactive services that will help make broadband access more attractive, while hardware vendors will need to provide solutions that will allow interactive content to reach the home easily.
The buzz around new media may cause a "been there and done that'' feeling, along with flashbacks to Time Warner's infamous Orlando, Fla., trial. But Keith Kocho, CEO of ExtendMedia, says that the Internet will make all the difference this time. ExtendMedia, founded in 1991, creates interactive programming and manages the integration and delivery of interactive content for clients including PBS, New Line Cinema and Cablevision. "We're building an interactive service for a major cable MSO in a large market," says Kocho. "We're building a series of specific interactive channel offerings on the ITV and broadband infrastructure to their consumer base."
"Previously, the underlying primary business model of interactive TV was video-on-demand. That was really a thin threat to put Blockbuster out of business, and consumers didn't really care about it,'' he explains. "Today, it's more than just marrying the utility of the Internet to the entertainment power of television. Interactive services will address the consumer impulse to want more when watching a linear narrative.''
Cut deals now
Cable networks like Bravo are getting ready for interactive content. "Operators shouldn't focus on sniffing out interactive technologies or sitting through demonstrations of services,'' says Joe Cantwell, executive vice president, New Media, for Bravo. "This show should be more about cutting deals than looking into the future in some hypothetical way.''
One of those companies looking to sign deals is Liberate Technologies, which is competing with Microsoft and Open TV in the set-top platform business.
"I believe almost everyone will be deploying interactive services in some form or another in the next year,'' says Mitchell Kertzman, Liberate president and CEO. "And I think what's changed is, it isn't a question of if but when. I don't know anyone who is saying if.'"
Cantwell, who is involved with defining the relationship between Bravo's cable content and interactive content, says the relationship between cable and the Internet has already been defined: A cable operator will need to offer Internet access. Cantwell says the cable industry is actually in a situation similar to where it was 24 years ago. At that time, operators were on the fence about simply being a retransmission service vs. being a true packaged- content provider.
"Just how much do they want to get their hands dirty in shaping and delivering content that matters to their customers?'' says Cantwell. "I don't have a sense that that question has been answered. And my challenge to the operators would be to get your hands very dirty, because somebody else is willing to bundle it if you're not.''
A new type of content, it appears, may look to become king. "Content drives viewers. It's not technology,'' says Kertzman. "Consumers want all the great content. Remember, color TV didn't take off until Bonanza started being broadcast in color. And as a technology supplier, we think we have to provide the tools and capabilities to provide a compelling viewing experience."
Looking for AOL
Liberate is providing technology to AOL for its AOL TV platform, and, while AOL doesn't have a booth at Cable 2000, it will have a presence-in the Liberate booth.
"A lot of people are dying to see what AOL TV is going to look like, and the only place to see it is in the Liberate booth,'' adds Kertzman. "AOL is going to do virtual channels, so there's the opportunity for traditional broadcasters and cable channels to provide additional interactive content, and there's an opportunity for people that don't get carriage today to do programming on these channels. One of the things that is true is that television is going to change a lot."
The challenge facing cable operators is threefold, according to those involved in the interactive environment. First, there is the need to build out a physical plant that can handle the demands of a broadband-hungry public. But beyond that, there is the need to build a parallel content track that will ensure that, once the broadband capabilities are in place, the consumer can easily tap into a new set of offerings. And then there is also the challenge of marketing services in a competitive environment.
"This is definitely the beginning of an industry, and there are challenges,'' says Jonathan Marx, president of ISP Channel. "It's the beginning of changing the delivery of content. The industry is emphasizing increased speed over dial-up access, but, at some point, users are going to feel like they have a car that can go 70 miles per hour but where do they go?"
Not 'ancillary service'
Marx says broadband-related exhibitors won't be alone in emphasizing interactive services at this year's show. "I think we're going to see a lot more emphasis on the major programmers going interactive. Today it's just ESPN or CNN, but you'll see more cable Web sites starting to stream media.''
For ESPN, the Internet is part and parcel of its effort to connect with viewers. "The macro issue is the relationship of cable networks with Internet, and I think, among the cable networks, we were one of the first to establish a position on the Internet,'' says John Skipper, senior vice president and general manager, ESPN Internet Group. "We've never perceived this as an ancillary product. Our business is to be wherever sports fans are, and that means bringing them real-time stats and scores as well as other content."
Skipper points to ESPN's recent draft-day coverage, which included a constant push and pull with its over-the-air coverage. And he does think video streaming will grow from a niche product to a core product, in time.
"We do quite a bit of both audio and video streaming, and we do it now as an added benefit to a small segment of our users, maybe 5% or 6%. But that number is going to grow as it becomes easier and easier for a household to hook up to broadband content. I've seen reports that it will hit 15% in 18 months and 25% in two years. But we're probably four or five years away from penetration around 50%."
Another recent success for ESPN was its "3Play," a new game available on its site. It launched on April 1 and has already had 650,000 people play a total of 4 million games. "We're experimenting a bit with enhanced television, and we'll have to figure out new applications for it," says Skipper. "We expect to be there in a meaningful way."
Keeping viewers interested
Bravo was the first programmer to offer an independent feature film over broadband (in 1998), and Cantwell says the approach taken by Bravo and the Independent Film Channel is to offer branded content on the Web sites that is similar to the TV content. The difference is it's created to take advantage of the Internet medium. "For us, that means short-burst video, a lot more depth, and the ability for the user to make some of that content portable,'' he says.
Electronic program guides are also looking to the Internet as a way to reach viewers. "The consumers are faced with a number of choices now,'' says Barbara Needleman, vice president, entertainment products, Tribune Media Services (TMS), which offers the ZAP2IT electronic programming guide. "The question is how does cable keep the viewer interested? With satellite having access to local channels, the message the operator gets out in the local market is important."
If operators aren't interested in implementing interactive technology today, Bravo's Cantwell says, they should make sure that any new cable programming services they sign on have a Web or interactive component in the works.
"I don't think they should launch a single video-only network today, and I believe in that strongly,'' he explains. "The operator has to demand that the programming partner come up with the goods that will help the operator grow the business for the long haul. Today, it's about video product and broadband product, but tomorrow it's going to be about interactive television. If the cable programmer isn't moving in that direction, the programmer is offering a one-note song that won't play in five years.''