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The Evolution of TV: iTV Opportunities

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By Peter Low

During the past few years, there have been many technological advances in online video and social media that can each uniquely supplement the television industry.  While both of these emerging mediums offer distinctive benefits to television’s dynamic ecosystem, we are still working to independently provide the reach, scale and breadth of another growing industry – interactive television (iTV).

The interactive television industry has existed for significantly longer than both online video and social media.  But because of technical distribution challenges, it has not been until this year that the industry is finally poised to reach critical mass and thus showcase its full power and capabilities.

In a recent earnings call, Comcast chief operating officer Steve Burke told reporters that he expects 25 million U.S. cable-enabled homes to be prepared for iTV by year’s end.  When combined with the 30 million satellite and IPTV subscribers who already receive iTV, it’s foreseeable that iTV will reach a majority of American households by early next year. With widespread reach and seamless scalability across cable, satellite and iTV, the value of iTV will begin to be fully realized.

So then, with iTV on the verge of explosion – what are the iTV opportunities for programmers, distributors, advertisers and of course, the consumer?

Programmers
The opportunities for programmers (i.e. broadcasters, content creators, rights owners, etc.) who choose to develop iTV experiences are plentiful. Programmers can differentiate new shows with iTV functionality that enables viewers to engage more deeply with their favorite shows. In addition, programmers can refresh and revitalize old programs by extending the viewing experience with interactive functionality. Viewer engagement increases with iTV offerings such as live voting and polling, trivia, factoids and sports statistics. Revenue-generating sponsorships, including links to RFIs and sweepstakes, can be integrated into programming in a contextually relevant fashion.

Another key benefit of iTV is its ability to measure engagement and offer Web-like performance and audience metrics that are essential for understanding audience behavior, including increases in tune-in rates and ratings.

As we all know, increased viewer retention and ratings correlates to increased ad revenues.  By creating iTV experiences that improve audiences’ engagement with their content, programmers are providing advertisers with the value and metrics they demand in order to keep them from moving portions of their ad spend to other mediums.

In 2007, Spike TV aired an interactive version of its Video Game Awards. Viewers were able to access behind the scenes content, such as trailers and cheat codes, as well as play a classic arcade game during the awards show. In total, 20 million people interacted with the show and ratings increased by 5 percent as viewers stayed tuned in for more than 30 minutes at a time, even through commercials. Last spring, HISTORY used interactive TV to offer its viewers historical factoids, daily
questions related to HISTORY’s programming content and the ability to set DVR timers and recorders for upcoming HISTORY shows. The interactive experience was also integrated into HISTORY’s TV series BATTLES BC and delivered promising results.

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