INTERACTIVE: BEHIND THE HYPE/WHICH IS THE BEST DIGITAL TV COMPANY TO WORK WITH? - The interactive revolution still needs a cautious approach/Digital TV promises many advantages to marketers, but John Owen thinks that a lot of care is necessary

As everybody knows, 1998 will be the year of the digital revolution.

As everybody knows, 1998 will be the year of the digital


Couch potatoes of the world will unite and one-to-one interactive

communications will take over.

Actually, despite the fact that digital TV will launch on all platforms

this year, the truly interactive elements may not happen in earnest

until 1999. But for advertisers - especially retailers - adapting to

this brave new world is still a pressing concern.

It’s a confusing time for those in charge of new-media marketing, as

they wonder: which interactive TV company do I work with? Do I go with

cable or satellite? Do I talk to the owners of the digital licences or

the people making the content? Why get involved with interactive TV when

I can interact with my customers on the Internet?

When considering that first, all-encompassing question, there is one

candidate that stands out: British Interactive Broadcasting, the joint

venture between BSkyB, British Telecom, Matsushita Electric and Midland

Bank. About 140 companies have already discussed becoming a ’content

provider’ - having a shopping area on the service - with BIB.

Given the impressive line-up of partners in BIB - so impressive, in

fact, that it is currently under investigation by the European

Commission - and its natural affiliation with the 200-channel package

Sky is due to launch on digital satellite in June, advertisers could be

forgiven for thinking this was the only serious contender.

Certainly, BIB appears to think so. Its acting chief executive David

Hilton, says: ’It’s a no-brainer to say this will be the best product

out there.’

Others maintain that BIB is nothing more than the favourite in a

three- or four-horse race. ’If I was a betting man, I’d put money on

BIB,’ says one industry insider. ’But in their haste to be first,

there’s a danger they might get it wrong.’

He continues: ’With e-commerce, the way you engage your clients is

critical. If you have a duff shopping system, no-one will be interested

and that could do untold damage to the market-place.’

Hilton is adamant that BIB’s service will be ’spot-on’ from day one.

And if that means certain services will have to be delayed beyond its

planned autumn launch, then so be it. The system is being constantly

updated as technology develops and will, he says, be TV-like rather than


What the four partners give BIB is a depth of resource unequalled by any

of its competitors - important when faced with the technological hurdles

that all players face in this virgin field. As Hilton says: ’This isn’t

rocket science; it’s more complicated than that.’

In its choice of technology, however, some believe BIB is at a


As long as it remains exclusively satellite-based, it must rely on

telephone lines for the ’return path’ from the viewer to the content


This not only requires an extra piece of kit - a set-top box - but is

potentially slower than cable.

Sky’s partners in BIB are, in effect, bankrolling the set-top boxes.

In this way, BIB is pivotal to Sky’s digital strategy, but it has yet to

announce its content providers, or even a brand name - although this is,

in part, due to the restrictions imposed by the EC investigation and,

insiders say, does not mean progress is not being made.

For its rivals in digital cable and terrestrial, interactive services

are not so crucial in the short term. BIB is talking both to cable

companies and to British Digital Broadcasting, which has half the

digital terrestrial capacity, about extending BIB’s services to these

platforms, and BDB is also in discussions with Microsoft about providing

viewers with access to the Internet. But Nigel Sheldon, a director of

the WPP new-media arm, MindShare Digital, says: ’The key subscriptions

driver will be movies and sport. Interactive areas will come in


This hasn’t stopped another big player, Flextech, from developing a

detailed strategy. Flextech, which will work as a content provider

across all platforms, has an interactive shopping channel, ScreenShop,

and is about to launch a second, TVTravelShop.

Some smaller operators are also vying for a slice of the market. Video

Networks has been testing its telephone line-based video-on-demand

services in Hull and is set to launch a London trial this summer. It

offers movies, music videos, cookery and keep-fit shows and educational

and transactional services. Those working with VideoNet include

Lloyds-TSB, Boots, Kingfisher and the Daily Mail. Its system will be

compatible with all set-top boxes.

Another triallist that has got in ahead of the crowd is Elmsdale Media,

owned by the cable company, NTL. It is testing similar services to

VideoNet in the Cardiff region. Elmsdale, which is cable-based and

funded by private investors, announced in September that participants

would include Thomas Cook, Littlewoods Home Shopping, Reuters and

Channel 4. However, it has been silent ever since.

As for the other cable operators, they are keeping quietest of all. The

word is that Cable & Wireless is working on a cable-specific electronic

programme guide and that it will begin to trial digital cable services

of some kind in the summer. Observers are waiting to see what C&W comes

up with - for, as Sheldon says: ’Whatever C&W does will set the standard

for the rest of the cable industry.’

C&W has plans for various interactive services, including so-called

enhanced TV, which allows viewers to play along with game shows and

choose camera angles during football coverage, but transactional

services seem less developed. As well as talking to BIB, C&W, together

with NTL and Telewest, is reportedly in talks with the US At Home

Network about a joint venture to provide high-speed cable Internet


But by relying on the Net for transactions, they risk cutting off a

lucrative revenue stream. As one senior cable manager admits: ’If you

give people free access to the Net, why should a commercial partner pay

you to come on board with transactional TV?’ Indeed, companies such as

Microsoft would have you believe that interactive TV is a red herring,

that the Net will be the key platform.

As most of those companies involved know only too well, the secret for

the moment is to hedge your bets. The only rule would seem to be: don’t

get into bed with anyone that isn’t preparing to work across all


Oh yes, and also avoid all bar those with the deepest of pockets.