Joined up TV

The real revenue drivers of interactive TV revealed.
IMPALA, Interactive TV, MHEG, MHEG-IC, Never.no, Sysmedia, Delivery & Transmission
Nader Qirat, winner of the fifth season of Star Academy, one of the first major successes for interactive and participation TV in the Middle East.
Nader Qirat, winner of the fifth season of Star Academy, one of the first major successes for interactive and participation TV in the Middle East.
Audience interaction, specifically voting, in shows such as Million?s Poet (above) creates greater viewer interest as well as revenues for the broadca
Audience interaction, specifically voting, in shows such as Million?s Poet (above) creates greater viewer interest as well as revenues for the broadca

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Home shopping, SMS voting, social networking crossovers and simple text-based services have all entered the broadcast sphere under the banner of interactive TV. DPME.com talks to some of the technology firms supporting these services and asks which of them can drive real revenues.

The development of a two-way connection between viewers and broadcasters regardless of the means of communication involved, has transformed the revenue options available to broadcasters.

Paired with the introduction of digital TV platforms, the humble TV set rapidly assumed new uses and applications for viewers. Operators could now offer games and communication services. Programme producers could incorporate money spinning user participation through SMS and online interaction.

More than a decade after the emergence of these platforms, interactive TV is still a developing technology. New platforms – particularly IPTV – create new opportunities and spark innovation in the industry.

Changing consumer behaviour, such as the pre-dominance of connected wireless devices and the high level of comfort most people now feel with the internet, means that many of the barriers between services and users have now been removed.

“Interactive TV today is more about video and information services than the games and other one-off applications,” says John Boulton, marketing manager with broadcast technology firm SysMedia, which specialises in interactivity.

“In some territories, especially Europe, the old teletext information services are increasingly migrating to interactive TV. This offers improved advertising presentation and the programme video-in-picture inset option that is very popular. Broadcasters are also looking towards interactivity as a means to deliver alternative video and audio streams plus video-on-demand and catch-up TV applications.”

As interactivity has become more widely adopted, the need for a universal standard has grown.

MHEG-5 is the open standard that has gained traction in Europe, which has been the source of many of the developments in interactive TV. As well as providing some congruence to the industry, an open standard also helps to simplify an area that was in danger of becoming overly complicated by the sheer number and variety of stakeholders involved in its development.

“Broadcasters want and need to be able to monetise their content to its maximum,” says Colin Prior, a founding member of the International MHEG Promotion Alliance (IMPALA). “Key to this is the ability to provide not only broadcast services, via a clearly navigable EPG, but now some form of video-on-demand or catch-up TV service and the inherent ability to carry targeted advertising. The world is moving quickly to a combination of push and pull mechanisms when it comes to video delivery and access requires interactivity. In order to facilitate this interactivity, set top boxes (STBs) or interactivity-enabled digital TVs need a middleware capable of handling hybrid services – broadcast and IP-based.”

Facilitating this requires investment, the money for which is harder than ever to find.

“The solution needs to be low-cost, yet technologically elegant with a small receiver footprint,” says Prior. “It should be market-proven with a clear technological roadmap that allows the development of a strong consumer model via conformance tested, affordable STBs or TVs with interactive-enabled tuners. MHEG is that technology and has proven itself in UK, New Zealand and Hong Kong.”

While the overall benefits of MHEG are similar to those of any open standard, the requirement for viewers to have a TV or STB-enabled for MHEG can have a limiting effect on the available audience.

“STBs and web-connected TVs are merely additional personal terminals, just as mobile phones and PCs are, but they have serious limitations,” says Saad Mouneimne, VP Middle East and Africa at never.no, an interactive technology firm. “Broadcasters today demand universal interactivity. They are much less interested in confined topologies like an STB network or web-enabled TVs. Modern broadcasters want viewers to be able to interact directly with their programming regardless of the make of the viewer’s TV set and or their pay TV provider. No matter what interactive device the viewer chooses – remote control, mobile phone, PC or social network – they should have the same opportunity to influence programming and to connect with the broadcaster and sponsors,” claims Mouneimne.

SysMedia’s Boulton believes that although the presence of the correct tuner is very important, the crucial factor is the availability of an IP connection.

“I think that future interactive TV services will be very much shaped by broadcasters’ reactions to the opportunity to distinguish between TV and PC services. Viewers want the display of web content in the context of the lean-back, multi-viewer TV experience,” claims Boulton.

“For the more forward thinking broadcaster there is an opportunity to wrap the best-of-the-web services into their own branded site that’s specifically targeted at the TV user and retains the programme-in-picture to keep eyeballs on the channel at the same time.”

Prior acknowledges the importance of web connectivity, however he views the hybrid approach as the likely future.

“We are already moving into a hybrid delivery world with both broadcast and broadband connectivity in a single box. Web-connected TVs are all very well but at the moment they are based on individual solutions rather than a united approach to the issue. This also raises the issue of updatability; after all, a TV is not a PC (even if there is a united approach). Then there is the issue of cost – any solution has to be cost-effective for manufacturers and consumers alike,” he says.

Mouneimne agrees that the provision of web services will be the cornerstone of successful interactive TV offerings in the future.

“Social networks are big. The next major wave will be concepts that combine these with broadcast interactivity,” he predicts. “We already see the most innovative broadcasters in Scandinavia and the USA moving in this direction, with interesting and encouraging results. This trend is also very liberating for the broadcaster because it establishes a direct link with the viewer that can be used to build loyalty. If you bring a sponsor into the equation this connection becomes even more valuable.”

Mouneimne is less confident about the ability of cable operators and hardware manufacturers to secure a portion of these revenues as the technology becomes web-based.

“Future broadcast interactivity will largely bypass them. This is true for a number of reasons, one being the long lifespan of a TV set or STB relative to a PC or mobile phone. A TV or STB that is cutting edge in 2010 will be seriously out of date five years from now however.”

Regardless of how interactive services are delivered, the opportunity to drive new revenues remains the same.

Boulton summarises the opportunity succinctly.

“Transactional services will play an increasing role for broadcasters. The process will become ‘see the advert, view the microsite and buy the product’ all through your TV.”

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