I-RECALL: Perspective - Open's demise will see the interactive TV industry take off

The news that BSkyB is to close Open rounded off an extraordinary

week that saw the cable companies getting cosier and ONdigital

recognising its parentage. Although it was taken as an opportunity for

the platforms to rationalise their debt-ridden businesses, it really

should be remembered as the week that finally launched the interactive

TV industry.



Last week's news has been on the cards since July last year, when BSkyB

announced its intention to take full control of Open. The move was no

doubt hastened by losses at Open in the first six months of BSkyB's

financial year. With only 650,000 transactions on the service the retail

model has hardly been a runaway success.



Advertising revenues will not have contributed anything yet as

interactive advertising is still not on the radar screens of most TV

buyers. For the few buyers in the know, it's clearly not cheap as chips;

who wants to advertise in a virtual mall? And putting a value on the

interactive element is still not possible.



The shift of Open into BSkyB is certainly going to help address some of

these issues. BSkyB's sales team will now handle the interactive ad

proposition as part of their traditional TV portfolio, which makes a lot

of sense. They have the relationships with the TV buyers in place; it's

just a matter of time before deals are done. Get the ball rolling and

the value issues will start to go away as more case studies appear and

metrics become better established.



And they're not the first to do this. Ntl took the uncomfortable step of

sacking their sales force and handing the job over to Telewest, who also

have a good team in place. If they weren't both so crippled with debt,

undoubtedly they would have tied the knot in a much more permanent way.

Nevertheless, one buying point across the UK cable network with both

companies converting their analogue base to digital as fast as they can

makes them a much more potent threat to BSkyB. That's good for business

in this fledgling industry.



Of course, don't expect BSkyB to wait for a fair fight. Now they have

control of Open there is no competition clause preventing them from

launching other interactive services outside their virtual mall. Now it

can turn its attention elsewhere - aside from an explosion of

interactive betting opportunities we should also see interactive

advertising develop around other programmes.



This has always been a weakness for BSkyB and the core strength of their

arch-rival ONdigital, which has also been busy rebranding to ITVdigital,

undoubtedly strengthening its overall consumer proposition and making it

easier to do business.



All in all, in the week that was, the industry is now simpler, the offer

more compelling and, in the current climate, the value proposition more

tempting.



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