Imagine never having to reach for the phone again when you want to order a pizza.
Just a few clicks on your television’s remote control is all that stands between you and your piping-hot delivery.
This is interactive television (iTV) and it’s local telephone company CT Communications’ take
on the future of home delivery.
Using its recently installed IP
framework, the Columbus, Ohio, company is testing out a new iTV offering
dubbed “Dinner and a Movie.”
Brian Strunk, CT Communication’s director of marketing and sales, said his
company has something it can use to compete against the other telephone and
cable companies in the area. With a
Fujitsu Siemens set-top box, Myrio’s user interface and
the online ordering and data delivery capabilities of NeoNova Network Services, CT has
designed a service to turn the television as we know it into something more than just a box.
The service, still in field trials, is just a glimpse at the promise, and
possible threat, of interactive television (iTV). Telcos, cable companies
and satellite networks are gearing up for what
some consider the next killer app for the Internet.
Is This for Real?
In the past 10 years, plenty of technology has
been hyped as the next must-have product for the home and business, “The
One” that will forever change the way we communicate: e-mail, instant messaging,
RSS
eBooks and online document sharing. But arguably, e-mail and instant messaging are the only two
killer apps that have had any lasting staying power in the international
community.
As far as communication mediums are concerned, there are only two that top them on a global
scale — radio and television. And they had a bit of a head start. So telecom providers, cable companies and satellite
providers are beginning to merge television’s ubiquitous hold on the world and morph the
Internet’s capabilities to create iTV.
“TV rules,” said Allison Dollar, co-president of the Interactive Television
Alliance (ITA), at the Supercomm trade show in Chicago last month.
“Worldwide penetration of TV is far higher than any other kind of device or
service — 98 to 99 percent worldwide, including third world countries. We
know there’s two-and-a-half per household in the U.S., places that don’t
have telephone service at all.”
For most people today, “interactive” means personal video recorders
ReplayTV, or 24-hour TV guides with information on the shows in the schedule.
But the possibilities extend far beyond most people’s expectations:
instant feedback on commercials, TV shows and actors; one-click shopping;
taking remote control user surveys; voting on local
referendums; and, yes, even ordering that pizza. It opens up the world to
consumers in much the way the Internet does today, though this time around
it’s all done with a set-top box and remote control.
Or is it Just Another Fad?
If you’re a follower of Metcalfe’s Law, which states that the value of a
communication’s system grows at approximately the square of the number of
users of the system, you can see iTV’s potential value is nearly limitless.
Data carriers love the potential. Where once portals like Amazon.com or
Google.com earned click-through revenue for their popup ads or link redirects,
iTV operators will get a small take in late-night acquisitions of “Freedom
Rock,” or the “George Forman Cookbook.”
“With eBay, the transaction opportunity completely bypasses the service
provider,” said Geoff Burke, video solutions field marketing director for
Calix, a voice, video and data equipment manufacturer. “With a set-top box
in every home, you have the opportunity to affect the relationship with
every one of the components that goes into that transaction.”
But while the potential is there, one industry analyst thinks the telephone
companies aren’t ready for iTV just yet. Mike Paxton, an analyst at
Instat/MDR, is not convinced iTV will develop into a killer app, and he doesn’t
think it’s the telecom carrier’s ultimate goal.
“Interactive TV, the way we break it down into different applications, would
not be a killer application,” he said, “nor do I think that any of the
specific interactive TV applications today could be considered killer apps
themselves. Now, what the carriers think, I don’t know, but my impression
is they don’t. I think the application they’re most interested in the most
is video itself. Once you have that capability, you can start thinking
about monetizing some of the other applications.
For a would-be killer app, the technology sure is taking a long time to
realize itself. Despite the fact that the vehicle for iTV’s launch is
already in place — it can run off today’s hybrid fiber coax (HFC), VDSL
measured, incremental approach to the technology, laying thousands of miles
of fiber optics.
Because of the capital necessary to roll out fiber-optic cable to homes — fiber
to the premises (FTTP) or fiber to the node
(FTTN) — expansion has been limited primarily to new-home developments and
smaller operators like CT Communications. But times are changing,
especially as equipment and fiber costs drop in price.
In recent times, the two largest telcos in the U.S. — SBC and Verizon Wireless
— are both investing heavily in fiber
over the next decade. Last month, SBC’s Chairman and CEO Ed Whitacre committed
his company to a $6.2 billion FTTN rollout over the next five years.
And Verizon started
laying fiber in parts of Texas in May.
According to Ells Edwards, a Verizon spokesman, the company expects to
pass one million homes in its nine-state region by the end of the year, and
two million by the end of next year. Because of more telecom-friendly
regulation at the Federal Communications Commission (FCC) and installation
costs, Verizon was able to commit to fiber.
“The cost of fiber is coming down, but the cost has always been in
installation,” he said. “We feel it’s reasonably priced to do so these
days.”
It’s All About the Software
The idea of marrying the Internet and TV has been a goal for many companies
over the years. Microsoft TV, for example, has gone through several failed
iterations
before settling on the software that now runs on the set-top boxes it
plans to market.
Finding compelling content is the goal of would-be iTV carriers these days.
Companies are heavily investing in software that will get TV users to click
on, and click through, their money-making services.
The Dish Network, for example, has developed a range of interactive
children’s games and a trivia game for the grownups, similar to the trivia
games found in sport’s bars around the country that pit one locale against
another.
Other companies are getting into the content act themselves. Earlier this
month, Comcast , Time Warner Cable
, Cox
, Sun Microsystems
and others launched
an OpenCable Applications Platform (OCAP) development contest at the JavaOne
conference to find the best iTV app.
The goal is to get new applications for the set-top box that go beyond the news ticker, instant
messaging and programming guides that exist today and deliver products that
increase sales, target audiences, allow for one-click voting (a la “American
Idol”), switch camera angles or whatever the developer can imagine.
“Cable television is the next frontier for Java developers, and the open
cable platform is a blank canvas for iTV artists; for serious developers
there is no richer medium than cable,” said Kevin Leddy, Time Warner senior vice
president of strategy and development, in a statement.
Outside the cable industry’s OCAP development standard, many other
application providers are looking at the benefits of XML
markup language that allows the same information to be disseminated in
different ways, as a method
to develop iTV content.
The Advanced Television Systems Committee, European Telecommunications
Standards Institute, Society of Radio Industries and Television Engineers,
the Society of Cable Telecommunications Engineers — they all have their own
standard, which could make developing applications for cable, satellite and
telecom companies difficult. Only one, the Advanced Television Enhancement
Forum, is being developed to work on any type of network.
Careful What You Ask For
While industry experts and carriers alike say the mainstream adoption of
true iTV is years away, once it comes it will bring its own bag full of
privacy issues.
“The sexy thing about iTV is that [carriers] are disrupting the traditional
business model for television,” the ITA’s Dollar said. “It’s not just a
matter of watching what you want when you want it, or [ordering] new things or
all of that stuff…it’s really market-driven, it’s a marketing play.”
And that’s what has privacy advocates worried. They fear that once iTV
rolls out, the TV you watch won’t be your expected “idiot box,”
passing information to the viewer. Instead, it’ll be watching you and your
viewing habits, your likes and dislikes, and passing them along to
marketers, advertisers, political organization or anyone else who can
benefit.
“This is the first time that we are really inviting people to observe us in
our own homes, so there’s a threshold of privacy that’s being crossed here,”
said David Burke, author of the book, “Spy TV,” which questions the extent
iTV will play in our decision-making lives. “It can be used not just to
sell deodorant, but to sell George Bush or John Kerry; it can be used to
change people’s attitude towards nuclear energy, or foreigners.”
Organizations around the world have just started to chime in with their
concerns. Privacy International (PI),
the Electronic Privacy Information Center (EPIC) and Whitedot.org have all
come out to warn consumers and legislators alike of the possible dangers
posed by iTV.
As far back as June 2001, EPIC issued a report about plans for “reshaping
American television, transforming it into a vast data collection and
interactive direct marketing machine.” The report also notes the Cable
Communications Policy Act of 1984, which governs the Fair Information
Practices of the cable industry, only applies to cable customers — not
telecom or satellite.
Critics of the privacy concerns say it’s no worse than the personalized
information stored in cookies
Burke said iTV’s pervasiveness, and use of the TV as a medium, catches
people at their most vulnerable — when they’re channel surfing.
“People get on the Internet, get what they want and leave,” he said. “How
does the TV work? You get on the couch and let your mind wander: It’s like
psychoanalysis. you’re in a very vulnerable frame of mind, you’re just
invited to let your guard down and that’s what advertisers count on.”
Regardless of the privacy issues, iTV is coming and will be here to stay,
Burke concedes. Whether it truly becomes the world’s next killer app
remains to be seen.
