Idea Whose Time Has Come?
A few years ago, Ted Leonsis, president and chief executive of AOL Studios, described “Seinfeld” as his biggest competitor. But even before the sitcom signed off this year, the World Wide Web had been stealing “eyeballs” from TV. Now America Online Inc. and a host of other companies are preparing to colonize the small screen--television, that is--with interactive programming.
At the dawn of digital high-definition TV, Microsoft Corp., cable providers and their partners believe that after years of false starts, marketable interactive TV may finally be about to arrive.
Back in the early 1990s, interactive TV was touted as the next paradigm-shifting blockbuster. Conglomerate Time Warner Inc., cable giant Tele-Communications Inc. and other media titans sponsored costly technology trials that included custom programming and the ability to view data, from sports trivia to soap opera star bios, without missing a jump shot or love triangle. They promised the chance to instantly buy products or view the movie of your choice, chat or play video games with other viewers and much more.
Unfortunately, the technology didn’t work, it was too expensive, and consumers didn’t buy it. The supposed killer app of interactive TV--video on demand, or the ability to offer a wide variety of movies of the viewer’s choice at any time--never materialized.
All the trials failed.
“It reminds me of the Newton,” said Josh Bernoff, new-media analyst at Forrester Research Inc. in Cambridge, Mass. Apple Computer Inc.’s fabled hand-held computer was announced with grandiose hype yet never sold well. “The Newton was not the wrong idea. It was the wrong implementation, and it was ahead of its time,” as the recent success of 3Com Corp.’s PalmPilot demonstrates.
In those early trials, the infrastructure for fast interactivity wasn’t in place, so each vendor had to create its own technology and supply participating households with powerful computers.
And the industry couldn’t figure out how a living-room leisure device could take on the characteristics and generate the revenue streams of interactive PCs. Several high-profile efforts at PC-TV convergence, such as costly big-screen PCs with TV tuner cards and cordless keyboards from Compaq Computer Corp. and Gateway Inc., flopped.
But new approaches to the convergence may soon make the masses’ remote-control trigger fingers itchy.
The Web has solved many technical problems by creating near-universal communications and multimedia standards, while microprocessor power has increased dramatically as costs have plummeted, allowing a set-top box to do what previously required a beefy workstation.
The most prominent linkage of the Internet to television has been created by WebTV Networks Inc., a Mountain View, Calif., firm purchased by Microsoft last year. The first version of WebTV’s device, similar to a set-top box, merely added low-end PC functions to a TV. But plummeting prices for computers and consumer devotion to TV as a passive medium squeezed the market.
WebTV Plus, released last fall, added interactivity linked directly to a few TV programs as well as a TV listings guide that users could customize and search. It also offers Web browsing while a TV program continues in an on-screen window.
The company says it has produced nearly 1 million units that cost $100 to $200 each. But the real profit potential lies in the monthly fees of as much as $24.95 that are currently being paid by some 500,000 subscribers.
Bernoff believes that as many as 1 million similar units could be on the market by the end of next year--particularly if, as rumor suggests, AOL jumps in with a competing device.
But most industry watchers believe that the technology behind WebTV Plus--which uses a phone line to send information upstream when you click on the remote and still emphasizes a computer-like Web-surfing and e-mail experience--has a limited life span.
“WebTV is sort of a stalking horse for what Microsoft and the cable providers would like to offer when they have high bandwidth,” said Jim Penhume, an analyst with Yankee Group in Boston.
WebTV Networks Chief Executive Steve Perlman views the potential market for the WebTV approach as much larger because he doesn’t limit it to the current WebTV equipment.
“You’re going to see these kinds of technologies appearing in all different forms,” he said. The company is working on licensing arrangements that would fold WebTV directly into TVs, set-top boxes and satellite equipment.
Cable will be the most logical host for WebTV or other interactive technologies. Forrester projects that WebTV-style devices will peak at 3 million units, but it expects more than 20 million households to have digital cable by 2007. Cable companies are rapidly deploying two-way systems that enable users to send commands as well as receive programming. Those systems should get an interactivity boost from digital set-top boxes and new technologies such as Irvine-based Broadcom Corp.’s graphics chip.
“The trick is finding situations where additional data really complements what you’re viewing,” Bernoff said. “If you’re watching a sitcom, you’re not craving more data.”
The germ of what people do crave might be found at Wink Communications in Alameda, Calif. Wink’s software offers “lean-back interactivity” that cable providers download into certain set-top boxes, said Brian P. Dougherty, chairman and chief technical officer.
Wink enables minimal interactivity with crude graphics for specially prepared programs--limited, thus far, to one-button impulse shopping plus abridged Web content from ESPN and the Weather Channel. Other broadcasters plan Wink-linked content for play-along game shows and profiles of TV personalities.
“We’re focused on little snippets of interactivity to enhance that broadcast experience,” Dougherty said. “If the interactivity is so complex that you’re going to get lost in it, consumers are not going to want it.”
Wink began deployment in Japan about two years ago, but in this country, the software is available in only a few thousand homes in St. Louis and Kingsport, Tenn. CableSoft Corp., based in Burlington, Mass., offers a similar system, focusing on delivery of localized sports, traffic, weather, classified ads and entertainment content. The service is offered in Jacksonville, Fla. Both companies plan rapid geographic expansion.
Bernoff says services will lead the way because they honor TV’s status as a leisure device instead of shoehorning it into the information-tool niche.
“It’s lazy interactivity--made for quick decisions and short attention spans, for people with a beer in one hand and a remote controller in the other,” he said.
Maybe it’s no great mystery that the Weather Channel and “Baywatch” are two of the first interactive offerings. Tired of insipid dialogue? Click on that swimsuit and buy it.
In another sign of modest expectations for interactive TV, “the really cool digital application turns out to be about TV”--interactive program guides, said Dave Roux, chairman of Network Computer Inc., a Redwood Shores, Calif.-based maker of software for networking digital appliances.
“Enhanced TV is not about doing a search on Yahoo or buying a book on Amazon.com--though you can do those things,” Roux said.
It’s about more mundane interactivity that people want in their living rooms, such as creating program guides that eliminate the channels you never watch or picking camera angles for football replays. Later, look for systems that let you play along with game shows or participate in instant news or entertainment polls.
“You’re watching ‘Jerry Springer’ and there are three people in a relationship and one has to leave. You get to vote which one should leave,” Bernoff said.
Not exactly edifying, but it will sell, experts agree. And even rudimentary interactivity may transform TV in the long run.
“Interactivity turns television from a mass-branding medium to a direct-marketing medium,” Bernoff said.
But a true transformation will take time, according to Barry Schuler, president of AOL Interactive Services, the division of Dulles, Va.-based AOL that plans to jump into interactive TV as early as next year.
Given the deeply comfortable relationship between the public and the tube, Schuler plans to tread cautiously.
“The TV is a particularly dangerous place to play around with this,” he said. “If a device ends up being difficult to hook up or doesn’t add benefits, people will throw it in their closet pretty quickly.”
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Times staff writer Charles Piller can be reached via e-mail at charles.piller@latimes.com.
