ITV Providers Vie for Real-Time Distinction
Several interactive television companies have the capability to allow viewers to order products directly through their set-top boxes, but prior to Wink's announcement, Commerce.TV was touting itself as the only ITV service that could update product orders in real time for both the consumer and the merchant.
Wink has also said that it is in discussions with both QVC and the Home Shopping Network to provide similar services. Real-time order updates and processing are essential to home shopping networks like ValueVision because during their broadcasts, they give a live count of products sold and thus can offer only a limited amount of each product featured.
"We are very excited about this test," said ValueVision's director of communications, Anthony Giombetti. "We are glad Wink chose us first, and we are anxious to see how it turns out. This is the process of the future and will allow us to keep the same business process and constantly update product counts and orders. This is vital. If we oversell or undersell, we are not effectively serving our customers."
Most of Commerce.TV's business-to-business marketing strategy, featured in trade magazines and at shows such as the National Cable Television Association's convention, centered on the company being able to provide consumers and companies with an immediate tracking number for products ordered through interactive television.
The system works much like an ITV catalog, with products being offered that have a connection to, though often not associated with, the programming. As a result of Wink partnering with a major product supplier like ValueVision, Commerce.TV may have lost out on a major product source.
"Commerce.TV is much like an online catalog on your TV -- so they need to acquire product to make their engine work," said Michael Kokernak, president/CEO of Back Channel Media Inc., Boston. "Wink is trying to control the content -- the data stream of the programming and the advertiser. They are really doing two different things.
"But other companies that are out there that can do real-time transactions are going to soon compete with Commerce.TV and Wink. It's going to be a real serious competition in that their transaction fees -- which both companies now quote as being between $1.25 and $1.50 per transaction -- are going to end up being pennies."
Wink has an advantage over Commerce.TV in that the system has been in use in major markets like New York, through Time Warner, for more than a year. Currently, Wink is in more than 20 cable markets reaching 200,000 subscribers and expects to be in 3 million homes by end of 2000. The jump is attributed to launching on satellite provider DirecTV this summer on both new and pre-owned units and the WebTV platform later this summer.
Commerce.TV will debut on the eighth-largest cable provider, Insight Communications, during the third quarter. The company also recently signed a 10-year agreement with OpenTV to provide its real-time, t-commerce system to OpenTV in North America.
"I doubt they will have it [real-time processing for ValueVision] ready [by the third quarter]," said Evan Saks, director of marketing at Commerce.TV, Dedham, MA. "This is the mainstay of our business, and we pride ourselves on being the only company that has this system ready to go. Wink is a very binary system. Even if they can do it, people will only be able to answer yes or no to purchasing something."
In fact, Wink's system will be updated to include personalizing of orders when the cable operators they are working with deploy more advanced digital set-tops. Regardless, these personalized offers are not a mainstay of home shopping, and the system can handle the only personalization necessary, which is a customer choosing either a single- or multi-pay scenario.
"The industry has been talking about selling products for years through television, and we're finally doing it," said Allan Thygesen, executive vice president of sales and business development at Wink. "By the third quarter of this year we will be on the air with ValueVision. Most transactions don't require real-time inventory, but ValueVision does because they treat product as a finite commodity. We will have response in real time and an interface to their fulfillment system. It will be general-purpose enough to be used with Home Shopping Network, QVC or any other of the shopping networks."
Meanwhile, Wink also announced that the first stage of its t-commerce applications is available to viewers of programs including "The Tonight Show with Jay Leno," "Behind the Music" and World Championship Wrestling's "Thunder" and "Nitro" programs. These applications allow a viewer to answer "yes" or "no" as to whether they want to order a specific product offered during the show, such as a CD, T-shirt or book.