Is interactive television
ready to move beyond discussions of electronic programming guides and video-on-demand? Yes, thanks to the acquisition of DirecTV by News Corp. Why? BSkyB, News Corp.'s U.K.-based satellite service, has been a bastion of iTV services, and it's expected that News Corp. will be just as aggressive with iTV in the U.S. Similar services will eventually cross the Atlantic and provide opportunity for an iTV company. OpenTV CEO James Ackerman took a few minutes to discuss the industry prior to heading to cable's big show.
Obviously, if iTV had taken off, there would be a few more companies still around. To what do you attribute the reticence of cable operators to deploy feature-rich iTV?
I don't think there has been an impetus to push iTV forward. It's been a nice and interesting experiment with some operators. Others have embraced iTV as a way to reduce churn, like Charter. But no one has stood up and said, "Interactive television is at the heart of our strategy, how we'll differentiate our content and retain subscribers." If DirecTV uses iTV to meet the same objectives BSkyB has, you're going to see a content offering brought to the U.S. market that the consumer has never seen before. The cable operator has the advantage of offering a terrific high-speed, on-demand, real-time interactive service to the consumer.
How easy will it be to apply the BSkyB experience to DirecTV?
There's a fair bit of work, and one of the big, unanswered questions is the extent to which existing set-top boxes can be used, versus deploying iTV services on new set-top boxes. If the installed base can be used to launch robust iTV services, you could end up with a system where, overnight, there are millions of subscribers in the U.S. with a rich iTV experience. We also can't ignore EchoStar. They've begun to launch iTV service in earnest.
Are cable operators going to implement a commerce application to make money, or are they going to deploy it to combat DBS services?
You'll see a number of operators wanting to take the lead and not wait until they're responding to a competitive threat. Charter is going to benefit from its application with QVC, which will allow television viewers to be able to literally press a button, choose the color and size they want, put in their QVC number and pin code, and get confirmation of their order in real time.
So are the days of ordering pizza through the TV behind us?
We're absolutely looking at other applications. It's funny how ordering pizza through the TV became the proverbial interactive-TV commerce application. At the end of the day, the real revenue isn't from selling pizza. The real revenue is generated by selling products that are impulse purchases: You see a product on QVC, pick up your remote control, press a button, and the product is on its way.