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Set-Tops to Redesign – Not Retire – DRTV

A new report by Forrester Research details the emergence of set-top Internet and personalized television devices that will test the resiliency and adaptive qualities of the entire direct response television industry.

With services that allow consumers to surf the Net for content and block out the advertisements that now support television programming, many fear that this may be the end of commercials and DRTV. The report disagrees and, instead, presents these changes as positive challenges that will allow the industry to flex its collective creative muscle.

The report, “Set-Tops Redefine TV” by analyst Tom Rhinelander, anticipates the coming of the set-top in two distinct phases:

• 2000 to 2002, when digital set-tops will be in widespread use mainly to access hundreds of channels of television programming.

• 2002 to 2005, when the use of set-tops for interactive and personalized television will make their way into 55 percent of U.S. homes.

The report takes into account the already mixed reviews that interactive programming has received in the past but points to new services recently made available to consumers that counteract previous failures by concentrating on preserving the television viewing experience. Providers of these services have achieved success by allowing viewers and marketers to experiment with the threshold of advertising intrusiveness. This gives consumers more control and marketers a lesson in how to avoid distracting from programming. They also have concentrated heavily in working with other companies to develop more entertaining interactive content.

“All these new technologies are going to allow people to avoid commercials if they want,” Rhinelander told DM News.”The fear is that people are never going to watch commercials again. But the truth is that every consumer at some point looks to commercials to find products. The key is that companies will have to concentrate even more on catching the interest of people in shorter amounts of time and, therefore, on the entertainment value more then the selling. This concentration on entertainment is already present in many infomercials and it must be stressed in the future.”

Rhinelander’s research alludes to the complications that will arise from local cable companies employing different interactive services to their customers and stresses that DRTV companies must educate themselves and make partnerships with cable providers who favor across-the-board standards in interactive television. Though there will be bumps in the road to interactive TV, the opportunities for new ways of tracking, analyzing and targeting consumers are immense.

New marketing opportunities and venues in which to highlight direct response television will increase as will the ability to capture qualified leads and target potential buyers incredibly more effectively.

“These systems give a great new way to capture qualified leads. One of the response mechanisms they can now have is a ‘Click here’ box that automatically sends out an e-mail or a URL or basically anything a company wants,” Rhinelander said. “The real opportunity is for these companies to figure out how they will leverage technology into doing the things they do today better. These boxes can do everything, to the point of storing credit card information and allowing automatic purchases.”

The report theorizes that every commercial will need to learn how to induce a viewer response. According to Rhinelander, the deciding factor in whether those in the industry will be known as forefathers or forgotten cousins will be the ability to accept and direct change.

“Everyone is a little weary about how it’s going to be. DRTV companies should get involved with these services looking to learn and grow with them,” he said. “They should not focus on making money quickly – because over the next five years, the landscape will be very muddy. The most important thing to focus on is to learn. Learn about the technology and the response rates, go to the cable operators and technology companies and work with them and offer them new ways of making this work. They are all in this together.”

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