Interactive Technology Shows Promise for DRTV

Claiming it will change the advertising landscape, Wink Communications, Alameda, CA, announced last month that its Wink-branded interactive television enhancement system has been embraced by a number of major national advertisers, news providers and entertainment broadcasters.

Already online in 10,000 households in Florida and Tennessee, the emerging technology has also won the respect of leading set top box manufacturers who are incorporating the necessary processing circuitry into their future product line.

According to Michael Baehr, spokesperson for Wink Communications, Wink is an interactive TV feature that is also being incorporated into satellite receivers and directly into some TV’s. He says “It allows a ‘wink and eye’ symbol to appear on the viewer’s television screen if the show they are watching is enhanced with [our technology] and service. When viewers see the wink and eye symbol they can click on their remotes to activate a simple text and graphics window which opens up at the bottom of the viewer’s TV screen.”

Baehr says the interactivity takes place within the boundaries of the text and graphics window where advertisers and programmers can provide everything from shopping options, coupons and sports statistics, to financial information, historical data or the opportunity to participate in an anonymous poll.

Wink has the attention of important advertisers who have long-waited for an enhanced television system that is genuinely deployable and offers real viewer interactivity as well as direct-to-consumer shopping convenience with secure credit card capability and fulfillment. Apparently having made advances in that direction, the company has reached agreements with Procter and Gamble, Clorox, Levi Strauss, Charles Schwab and AT&T. All signed up for the technology along with influential content providers CNN Headline News, ESPN, NBC, Showtime, HBO and others.

In total, Wink Communications says it has contracts with twenty national networks and broadcasters, and each has committed to airing a certain amount of Wink programming for the company’s planned push into a quarter of a million homes by this summer.

Perhaps the biggest surprise for direct response marketers is Wink Communications’ relationship to set top box manufacturers in the United States, which Baehr says are already equipping their next generation of units with technology equipped to run Wink-enhanced programming.

Richard Doherty, a director at technology consulting company, The Envisioneering Group, confirmed that this is happening. “That baseline of functionality is being put into every manufacturer set top box right now,” he said. Doherty added that many of new set top boxes are going to be sold through retail outlets, which means it will take time to get them into people’s homes. He said the technology will “probably kick in during the beginning of the year 2001,” – a date that has some industry watchers taking a deep breath.

Consumers groups are asking questions about how cable companies and set top retailers and systems brokers are going to manage viewers’ personal information under an already patchy framework of privacy protections. There could also be a looming convergence battle at stake should set top box manufacturers or cable companies see opportunities for exporting hardware overseas or conducting e-commerce financial transactions across national borders using advanced encryption technology.

But Sue Hofer, a spokesperson with the U.S. Commerce Department who is very familiar with that subject, said “that sounds like a debate that is premature to me.” She also confirmed that no manufacturer she is aware of has yet approached the government about set top box encryption or export issues. Moreover, Sean Kaldor, vice president for Developing Markets and Technologies at IDC, Framingham, MA, said, “set top boxes tend to be manufactured in the country where they are used.”

However, he noted that with some set top boxes and interactive systems being planned, “technically it would be possible to say this consumer was watching this channel… but it’s a lot of data to manage.” Still, he expressed confidence that there will be a balancing of privacy issues as the technology progresses -otherwise advertisers wouldn’t embrace it.

To be sure, plenty of marketers will remain skeptical about how fast cable companies and retailers are going to get the next generation of set top boxes into millions of homes. But there may be encouragement on that front as well: 75 percent of the set top boxes manufactured in the United States are made by either Pioneer, Scientific Atlanta or General Instruments – three companies clearly capable of making the idea and availability of “personal set top units” as common as standard VCRs. And like VCRs, these products are going to be branded under competing license names but will almost all be compatible with the majority of the country’s television cable network systems.

Whether or not that spells success for Wink is yet to be seen. Kaldor said he think “the first thing on consumer’s list is more likely to be email and video on demand.”

Baehr acknowledged that Wink exists on a spectrum of interactivity that is emerging with basic broadcast TV on one end, and “pure PC-driven task and function-oriented activity on the other.”

Perhaps most telling is the way Wink cautiously characterizes what it is doing in the much anticipated world of television interactivity. “[We know] this is a crucial year for us in integration and deployment,” Baehr said. “But we’ll be able to provide web browsing capabilities and program guides [in time]. Right now we already provide robust e-commerce activity through a smart technology that piggy backs with the experience of watching TV. We call it enhanced broadcasting. It’s up to the networks and the advertisers to decide what appears in that window.”

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