It has been predicted that the Internet will be accessible in almost every electrical device you use. Now that it is entrenched in our computers, the next big wave, i.e., Internet access via the television, interactive TV, has started. How it will affect TV programmers, cable operators and advertisers is worth discussing.
Many TV programmers have invested large sums of money developing Web sites, but few have found it profitable, and by the end of 2000 most had laid off many of their Web employees. Why? Because everyone likes the cool Web sites, the information, games, music, etc., but no one wants to pay for it (e.g., Napster) — at least not to access it on their computers.
Face it, computers are a good work medium, but they are not a great entertainment medium, at least not compared with a 52-inch TV screen. Many TV programmers have indicated that they will use their Web sites more effectively to brand and promote their TV properties.
How will cable operators make money from the Internet service they provide? Many are now venturing into the Internet service provider business and will try to solve the same problem that TV programmers could not. Cable operators are paying for set-top boxes to have Internet browsing capabilities built into them. Some service providers think that basic Internet access might be paid for by advertisers or by t-commerce partners in exchange for exclusive marketing rights to their viewers.
What will it be worth to advertise to interactive TV viewers? If the competition for prime-time viewers grows, will the cost of prime-time advertising increase? It might, if Internet access at work is eventually monitored and regulated by employers. When this happens (and it will), most people will be forced to access the Internet on their own time. Most of my expendable time is between 6 and 10 p.m. — isn’t that prime TV viewing time?
If you had the choice to access the Internet and watch television at the same time, would you? I know I would — why not make the most out of your personal time? With the new set-top boxes that are being shipped, soon you will be able to jump between a chat room and Monday Night Football, or eBay and the nightly news.
In 2001, prime-time Internet viewing will grow as more businesses cut back on their employees’ non-work-related Internet access. Companies are already developing software that limits access to non-work-related sites. Once access to the Internet at work is monitored and controlled, Web surfing will have to be done at home, during prime time.
As more viewers are forced to do prime-time Web surfing, an interactive viewer tug of war between Internet services and traditional TV viewing will emerge, placing greater emphasis on prime-time advertising. Interactive service providers have developed ways to place TV tuning advertisements in the program guides, chat rooms, e-mails and anywhere else regular banner advertisements can be placed. These high-tech ads allow TV programmers to advertise a TV channel on the Internet and tune the viewer to a TV channel, all with a click of the remote control.
Like it or not, the Internet is creeping into prime time. May the best service, or, rather, the best “advertised” service win.
• Tom Romero is vice president and co-founder of Set-Top.com, San Diego. Reach him at [email protected]