INTERACTIVE: BEHIND THE HYPE/INTERACTIVE TV; How operators are vying to complete the interactive loop,
By MEG CARTER, campaignlive.co.uk, Friday, 29 November 1996 12:00AM
Digital interactive TV may be on the way - but will it be delivered by satellite or cable? Meg Carter reports
Digital interactive TV may be on the way - but will it be delivered by
satellite or cable? Meg Carter reports
The digital TV revolution is dawning and with it will come a new
generation of interactive delivery systems. In the blue corner, digital
satellite; in the red, digital cable. Yet predicting who will come out
on top remains an imprecise science.
To date, the stumbling block to achieving true real-time inter-activity
has been the so-called return path’, necessary for viewers to
communicate with broadcasters.
Terrestrial broadcasters have no return path, unless you count the
opportunity viewers have to phone in. Cable and satellite delivery
systems, however, already offer limited interaction.
At one level, cable systems have the potential to be the sure-fire
winner in the race for interactivity. They have advanced fibre-optic
networks already in place and a number of operators have conducted
interactive trials. Unlike satellite, they have a built-in return path -
However, satellite also has its advantages: notably, the clout wielded
by Rupert Murdoch.
Interactivity, for the time being, may remain limited, but BSkyB is
planning a plethora of interactive and on-demand services when it
introduces digital satellite broadcasting next year.
Murdoch is further ahead than any of his rivals in developing the
digital decoder box essential for receiving these new digital and
interactive channels. And, insiders claim, although limited to
using telephone lines for the return path in the short term, future
technology could enable viewer responses to be transmitted back to the
broadcaster via satellite.
Simon Howson-Green, the head of Internet at BSkyB, outlines the options
to interact already available: ‘At a basic level, there’s the
interactivity with Sky text. More sophisticated is Intertext, where
viewers can use the touch-tone keypad of a telephone to key in
letters and numbers to create their own small ads, key in messages or
Existing applications, however, are limited by bandwidth, which dictates
the number of people who can interact or play at any one time and the
sophistication of the images carried.
Digital promises to free up bandwidth and boost channel capacity,
allowing a new generation of services - from near on-demand channels to
pay-per-view. Reliance on a telephone return path will not pose too
great a problem, Howson-Green insists. ‘As far less data will be coming
back to us, the capacity needed for the return path will be much lower.’
However, a Sky source adds: ‘There are tremendous possibilities for
delivering vast quantities of information other than via a telephone
line. Data could eventually be broadcast direct to a PC and viewer
responses transmitted back to the satellite.’
Not that the latter option is seen as viable by any of Sky’s cable
competitors. John Doherty, the head of strategic development at Nynex,
comments: ‘To get information back without a phone line, you’d need
another set-top device: a transmitter. It’s an infrastructure that will
be costly to develop, costly to buy and which does not yet exist.’
Different cable operators have networks at varying stages of
development. At Nynex, the return path is almost fully in place, giving
its customers the opportunity, for example, to buy the recent Holyfield
versus Tyson pay-per-view fight by hitting a button displayed on-screen.
‘We are already offering impulse pay-per-view services and trialing
cable modems in the North,’ Doherty asserts.
Other cable operators are running similar trials. Videotron, for
example, has worked with J. Walter Thompson on an interactive test
involving Kellogg’s Frosties. The company has also experimented with
basic interactive TV programming where four different versions of the
same show are relayed to homes via four separate cable channels.
Viewers can select different options, such as camera angles for sports
events or answers in a quiz show or a learning programme.
Cable’s data capacity is greater than a satellite and phone line-based
option, Doherty claims, making a faster and better quality service.
Another factor, he adds, is that ‘we operate a closed network - there is
no outside interference from rain or clouds’.
Cable operators insist they will be ready for digital satellite’s
launch. And they claim their hand is strengthened by increased
consolidation in the business.
Just last month, Cable and Wireless merged its Mercury Communications
division with Bell Cablemedia, Nynex and Videotron resulting in a major
telecommunications force. The new entity commands unprecedented clout -
access to six million households in the key markets of London,
Manchester and Liverpool. In other words, critical mass in the
residential market at one stroke.
But Murdoch has been busy, too. He is forging increasingly close links
with BT, which plans to invest pounds 5 billion in transforming
Britain’s telephone network into the most technologically advanced in
the world, capable of relaying programmes and movies via an ordinary
phone line. BT recently announced a merger with MCI, which already
holds a stake in News Corporation.
A Murdoch-BT alliance rivals the powerful technological advantages of
cable-based networks, insiders claim. BT is even considering
contributing to digital decoder development costs and subsidising their
But, cable operators warn, the regulators have already been alerted to
this powerful alliance and Oftel recently voiced fears about a joint
promotion with BT offering discounts on Sky subscribers’ phone bills.
Satellite may have less capacity - 60 per cent of cable for carrying
viewer data, according to some estimates - but combined with the
national penetration of BT and the centralised administrative clout of
BSkyB, this is still significant.
The ability to manage customer response quickly and efficiently and
information will be crucial. While some cable operators - such as Nynex
- are investing significantly in this area, Sky’s centralised state-of
the-art customer centre in Livingstone remains a powerful card.
Both Sky and BT are also adept at marketing, while cable, in the wake of
its calamitous joint advertising effort this year, has much work to do.
As the table on this page shows, both sides have strengths and
weaknesses. It’s just that Sky’s strengths could prove to be in the more
cable versus satellite in the race for interactivity
+Built-in return path: the cable -No built-in-return path; must
rely on telecoms partner: BT
(although in the longer term,
limited reverse path could be
+-Although data capacity is high, +-BT has the numbers, but not
cable penetration remains the hi-tech network. It will
significantly lower than BT invest pounds 5
billion in development
-Likely to have to rely on Murdoch- +Developing its own digital
developed digital decoder boxes decoder boxes which, many fear,
for future digital interactive service will give it the killer
provision as Murdoch-BT digital advantage
decoder plans are further ahead Retail price could be
subsidised through partnership
-Content will be key - and for the +Sky, by comparison, is the
time being, cable relies almost content king
exclusively on material sourced
+Industry regulators are likely to -Oftel has already voiced concern
favour cable under growing pressure over a recent Sky-BT joint
to rein in Murdoch’s media promotion offering subscribers
ambitions discounted phone bills
-Joint ad campaign dropped after +Both Sky and BT are experienced
one year. But new Cable and and adept marketers
Wireless merger may provide more
This article was first published on campaignlive.co.uk
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