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The July 10, 2008 Issue Provided by System Dynamics Inc.
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Cable Show 2008: Interactive TV--Has Its Time Finally Come?

Various observers and companies have believed that the time was right for interactive TV applications going back to the 1970's, when services like Ceefax and Qube first emerged. Dave, who was part of the founding group of Prodigy, one of the early US ventures, is philosophical about these cycles. "A good idea at the wrong time is not a bad idea. It's just that its time has not yet come."

Recent news has been full of items directly relating to the renewed push for interactive TV and the advertising which will support much of it. For example:

  • Hiring David Verklin as CEO of the cable industry's recently-announced Canoe Ventures (see below for more on Canoe).
  • Microsoft's purchase of Navic Networks, a creator of advanced advertising solutions
  • Binding agreements on tru2way technology deployment between major consumer electronics (Panasonic, Samsung, Sony) and information technology companies and the six top U.S. MSOs (see the preceding article on tru2way).
  • Comcast Media Center's launch of HITS Advanced Interactive Services ("AxIS"), a centralized platform designed to support advanced interactive application developers and facilitate their launch on cable systems serving small to mid-size markets.

Interactive Advertising and eTV

$70 billion is the number to keep in mind. ScreenPlays says that's the size of today's US TV advertising pie. Of that amount, they peg cable as currently having a $5 billion slice. From our discussion (above) of tru2way, it is clear that waiting for widely deployed tru2way devices is a slow path to grabbing more of those advertising dollars.

Ford ETV Application --> Click for larger pictureSince tru2way will take time to be widely deployed, eTV (enhanced tv) is the path MSOs are taking to enable viewers to interact with a program or ad.

eTV is enabled by something called EBIF (Enhanced tv Binary Interchange Format). EBIF is a thin client, downloaded into a set-top box, which interprets eTV signaling and binary commands that are sent via an in-band stream. It is the means of providing interactive applications on basic set-top boxes. Since EBIF can work on most of today's installed set-top base, while tru2way requires new set-tops, EBIF forms a stepping stone toward tru2way.

EBIF initially focuses on “bound” applications, which means that eTV interactivity triggers pop up with the program being viewed (e.g. audience polling for contestants). There can also be "unbound" applications, which are independent of any channel--e.g., the Electronic Program Guide (EPG).

When an incoming eTV trigger is detected by the client software, it decodes and displays the clickable thing--a "widget"--on the TV screen. A widget is a "custom mini-application for small self-contained tasks overlaid on top of TVs so they don't interrupt the program being watched." Widgets are already familiar in connection with the Internet, where they are files that define a small, single-purpose software application on the PC. Verizon FIOS currently has TV widgets for weather and traffic. Other TV widgets can include personalized news and sports scores.

The use of EBIF will be a critical component for a newly-formed company called Canoe Ventures. Formerly known as Project Canoe, the company has been jointly formed by six major cable operators (Comcast, Time Warner Cable, Cablevision, Cox, Charter and Bright House Networks) to create and use a single national advertising platform for selling targeted ads across their systems. The goal is to bring cable advertising the same level of measurability and addressability as the Internet. The ads would come from a central point, which would also handle billing, ad avails and other back office functions.

To enable Canoe, MSOs will have to get EBIF clients into legacy set-top boxes, an effort that will take work but represents a big payoff.

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