OpenTV Debuts Ad-Supported Chat, SMS

While interactive television and iTV advertising remain niche markets at best, OpenTV is aiming to beef up the fledgling industry with a suite of new advertising-supported services.

Specifically, Mountain View, Calif.-based OpenTV, one of the largest global players making software for network operators to deliver iTV programming and ads, will now offer Short Message Service and Chat services through its systems, about 18 million of which are in use globally.

“These applications show Open TV’s commitment to providing the complete interactive television solution,” said OpenTV chief executive James Ackerman. “Both enable operators to launch highly compelling interactive TV communications services quickly and easily.”

Ideally, cable and satellite operators using OpenTV’s service — which include EchoStar’s DISH Network, and General Motors-owned DirecTV Latin America — that choose to add the new services will glean additional revenue by selling ads on their SMS and chat applications.

But unlike many of the innovations promised by advocates of interactive television advertising, which has yet to see much progress beyond interactive program guides, the new OpenTV services are designed to be quick money-makers, since they capitalize on consumer services that enjoy an already-healthy demand.

For instance, users of mobile phones and PDAs send millions of SMS messages daily, with several industry watchers saying SMS traffic reaches about 15 to 16 billion messages each month. The GSM Group, an industry association representing GSM mobile network providers, says that that figure should grow to about 40 billion by January.

Similarly, online chat continues to be one of the main draws for online portals like Yahoo! and MSN, and services like AOL Time Warner’s America Online — each offering thousands of public and private chat rooms, many of which are supported by banner ads.

In addition to the growing mass of chat and SMS users, both audiences tend to skew toward a teenage demographic — often highly sought-after by marketers and advertisers.

OpenTV said it expects operators to charge per-message for SMS, in addition to showing ads, and to enable advertisers to send messages to users. Meanwhile, ad-supported chat could link directly to other users or to Internet chat rooms.

Additionally, Ackerman said that operators might be expected to use the new applications as selling points for their own iTV services to consumers.

“OpenTV has unparalleled global experience in helping operators to use the latest interactive TV applications to gain and retain viewers while generating new revenues,” he said.