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Going for the Gold

Newnam predicts 15 million homes interactive by 2005 8/22/2004 08:00:00 PM Eastern

Scott Newnam, president and CEO of GoldPocket Interactive, has
turned CBS, ABC, NBC and Fox into interactive-services believers. It's a system
applicable to set-top boxes, mobile phones and PCs. In fact, Newnam says the
much-maligned interactive market is ready for prime time. He recently discussed
the market segment with B&C.

Interactive-TV services are now more than just an
ancillary interest to cable and satellite. Why the increased
attention?

There are two things serving as the catalyst for interactive TV. The
first is Rupert Murdoch, who made a killing doing ITV in Europe and says he'll
do it here with DirecTV. That's getting cable operators to move. The other is
the fear of TiVo. Historically, we never saw advertisers throwing any dollars
at ITV. Now that's not the case. More and more money is moving to new media;
the 30-second spot is [no longer] the dominant solution. This has led to a big
jump in our business.

How big?

We now have 15 television networks that are new customers, including
ABC, NBC, CBS and Fox. And about 80 advertisers have come in during the past
year.

What is it they're doing?

The TV networks and cable operators are buying technology from us that
allows them to make ads interactive. Then, they're selling those spots to the
advertisers.

Which cable operators are doing interactive
advertising?

Time Warner Cable in Hawaii was the first to launch a system that most
would call a vision of the future. Viewers turn on their TV, and they can play
against TV shows. And three times every hour, we put the names of the top
players playing live at that moment. Another big operator is EchoStar, with 8
million boxes fully capable. They're actually now doing an application with NBC
for a video mosaic of all the different Olympic channels.

Time Warner Cable is dabbling with interactive in
Hawaii, but when does it deploy that service system-wide?

Every operator is having an ITV trial in some market, but those trials
never result in a system-wide deployment. In the U.S. today, there are 9
million households with interactive: 8 million EchoStar and 1 million in
different cable pockets. My estimate is that at the end of 2005, we'll be at 15
million homes, with about another 6 million on cable and 2 million on
satellite.

For advertisers to get interested, won't they need
a single MSO to offer the kind of scale that makes ITV advertising
attractive?

The tests now, particularly in Hawaii, are going great. What you'll see
is each operator launching one or two test beds. Next year, the market will
expand to well over 30 million. And unless something goes wrong, all the
operators will be doing it. Interactive will be more like VOD, which has rolled
out everywhere.

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