B3TV's Kaiser Brings Internet Experience to Interactive TV

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David Kaiser likes to keep himself on the cutting edge of new technologies.

The 46-year-old founder and CEO of B3TV, San Francisco, has positioned his new company as one of the first Internet-based electronic commerce solutions to allow television viewers with an Internet hookup to order merchandise directly from their television screens using a TV remote control.

The interactive TV concept is so new - there have only been a couple of tests of the system so far - that B3TV seems to be ahead of its time. But that's the way Kaiser likes it.

"The key is to get in before there's a whole lot of people," he says. "I like to work on things that are really high leverage, high risk, and to be in place a year or two before a technology becomes big."

In that, Kaiser is repeating his professional history of being ahead of the curve when it comes to new technologies and new media.

Prior to founding B3TV in 1998, Kaiser was senior strategist and vice president at America Online. Before AOL, in 1994, sensing the Web's potential, Kaiser and several colleagues launched Navisoft, an Internet authoring tool company. AOL purchased the company and brought in Kaiser, who went on to facilitate mergers, acquisitions, technology licenses and strategic relationships, most significantly with Netscape, Verisign, Cybercash, RSA, WAIS, IBM, Javasoft, Yahoo, The Sports Network, Claris, Progressive Networks, PointCast Networks and Apple Computer. In late 1997, Kaiser's focus turned to AOL's TV service, which in turn led to B3TV.

Kaiser is convinced that television is going to become interactive and that cable and broadcast networks and advertisers are going to want to turn that interactivity directly into e-commerce.

"Interactive TV will succeed because it brings the power of interactivity and e-commerce to the wide audience of television," he says. "Nothing can match television's ability to aggregate people. It's a very powerful phenomena. The show "ER" routinely hits 25 million viewers, and that's only one show on one night on one TV network. Bringing together the Internet and TV - that's the future."

It certainly is the future considering there are at most 1 million households properly wired to receive interactive TV at the moment. But what Kaiser, along with much of the industry, is counting on is a strong push on the part of cable companies to bring interactive TV into millions more U.S. homes within the next 18 to 24 months.

"All the research companies - whether it's Forrester, IDC, Jupiter - show interactive TV penetration will reach a quarter of all households by 2003," says Kaiser. "That's really not that far in the future."

The growth of interactive TV will depend on consumer acceptance of the technology and its perceived value.

"People today aren't necessarily dying to have interactive TV, but I think it's more a case that people don't know they want it yet," says Greg Smith, director of strategic services, DarwinDigital, New York.

"Cable networks are looking at stagnant revenues, and they definitely need something new to get consumers' attention. What could be more new than the Internet and easy accessibility to the Internet. When people try a T1 or broadband connection, not many are happy to go back to a dial-up, 28.8 modem."

Smith says that Kaiser's timetable for the rollout is realistic. Since cable operators realize it's in their best interests to wire homes for interactive TV, it's a top priority.

"There simply is more advertising revenue to gain by doing this," he says.

All TV Will Be DRTV

Advertisers have been looking carefully at interactive TV as a viable ad media, says George Fertitta, co-founder and president of Margeotes Fertitta + Partners, New York. Fertitta also serves as a member of the board of directors of B3TV and acts in an advisory capacity for the company.

B3TV has attracted about $5 million in investment capital from high-tech venture capital firms Sequoia Partners and Integrity Partners.

"Right from the start, I have felt this is a viable medium with a big ad future," says Fertitta. "Advertisers really do get that this is an idea that is going to happen. And they're excited about the direct advertising possibilities."

While Kaiser believes the cable companies are putting interactive TV on the fast track, he still chafes at the slowness with which it is being adopted. Other than urging the companies forward, he has to pace B3TV's growth so that it can continue to innovate and grow while he waits for the industry to catch up.

Kaiser spends his time talking about interactive TV and B3TV with cable networks, broadcasters and advertisers. And he also spends considerable energy plotting the next tests of the B3TV concept.

Already slated is an interactive broadcast similar to one in August (DRTV News, Aug. 9, pg. 1) that brought together WebTV-wired terminals, UPN affiliate KBHK-TV, San Francisco, and Domino's Pizza. All the participants in that test were happy with the results.

"B3TV's enhanced advertising is the beginning of a revolution in interactive TV," noted Jerry Braet, vice president and general manager of KBHK-TV, in a written statement.

"TV commercials have always elicited an emotional response that no other medium can match. Now viewers can immediately act when they see an advertisement that piques their interest. The combination of an intriguing commercial, with the immediacy of interactive response, creates immediate sales for our sponsors and a promising new revenue stream for us."

Both Domino's and UPN have expressed interest in doing a national trial. However, Kaiser is currently working on a broadcast with another partner, which he declined to identify, for a test that might run by late this month.

Others in the industry point to the executive team that Kaiser has attracted as evidence that B3TV intends to be the industry-leading company.

Among those joining Kaiser is Todd Lash as B3TV's vice president of marketing. He was an original employee of AOL and also worked as vice president of product marketing at Goodcompany.com, where he designed an Internet subscription service.

Also, Suzanne Stefanac, a former executive producer at MSNBC and ZDTV now is vice president of creative at B3TV, and Jay Weber is chief technology officer of B3TV, previously a technology fellow at Hewlett-Packard/Verifone.

"If they can hang in there until the industry catches up with them, they'll have a very successful concept," says DarwinDigital's Smith. "It's really the next logical step."

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