Experts: iTV Players Need to Tackle Privacy Issue Now

To avoid the same headaches, scandals, and obstacles encountered by the Internet industry as it slammed face-first into the privacy issue, experts said it’s important for interactive television players to address concerns now — while the business is still developing.

That’s the consensus of a panel of experts on both sides of the privacy issue — Jeffrey Chester of the Center for Digital Democracy, Ben Isaacson of the Association for Interactive Media, Ilario Pantano with Filter Media LLC, and Jules Polonetsky of DoubleClick — that convened for a conference on iTV put on by Columbia University’s Interactive Design Lab Tuesday.

“The danger is that we’re heading for the same problems that we had on the Internet,” said Polonetsky, chief privacy officer at the online advertising giant. “Internet companies are trying to tack data protection on an infrastructure that wasn’t built for that.”

Since the Internet grew up so quickly, there was no time to ponder and come to consensus on these issues, he said, and many companies built up their business models — and their technologies — without any clear guidelines on what would eventually be acceptable. Because of that, he argued, rules for the handling of consumer data should be agreed upon and “baked in” to the infrastructure of iTV.

No one knows better than Polonetsky, who was called in to act as an ombudsman at DoubleClick after its data collection plans landed it in hot water, how difficult it can be to change direction once a business model is in place. But how far along the iTV industry actually is, was a matter of debate.

Although Pantano, senior partner at iTV consultant Filter Media, said it was too early to get concerned about the abuse of consumer information — given that very little is actually being done in the iTV space in the U.S. right now — Chester said companies’ stated intentions dictated a response from privacy advocates. His organization last month released a report titled “TV That Watches You: The Prying Eyes of Interactive Television” in an effort to raise awareness about the tracking capabilities — or potential capabilities — of interactive television.

“It’s extremely alarming what they want to do,” said Chester. “The industry’s goal here is to do this kind of one-to-one messaging or microtargeting — that’s their word — on the Internet and on interactive television. We can’t allow that to happen. There are serious privacy risks ahead.” Chester even went so far as to compare Liberty Media Group’s John Malone to Darth Vader (a comparison previously made by Al Gore and Forbes magazine).

Isaacson of AIM, an industry group, challenged Chester’s assertions that interactive television companies are secretively laying out their plans without the knowledge of consumers, saying that the attention given the issue on the Internet has encouraged marketers to be more open. “We are trying to make sure that every customer actually knows what type of data is being collected,” said Isaacson.

All proponents of tracking want to do, said Isaacson, is make television as accountable a medium as the Internet so that advertisers know they’re getting their money’s worth. “At the end of the day, if people are changing the channel during commercials… then we need to change the model,” he said, adding that things like product placement might be good options in that environment.

The main sticking point between Isaacson and Chester — an issue that remains controversial on the Internet — is the question of opt-out versus opt-in. Most companies say they want to inform consumers of their data collection practices, and give people the option of opting out. In this scenario, the default would be the collection of data. On the other hand, privacy groups would rather that consumers proactively choose to have their data collected, by opting in — a standard that the industry feels is too harsh, and may hinder companies’ ability to run successful businesses.

Whatever the eventual outcome, the dialogue has clearly begun, so Polonetsky concluded with a call for moderation. “If you come to this with the view that data collection is a bad thing…we’re clearly going to be talking past each other,” he said. “I think there is a middle ground, and I think it has been found in other areas. The question is, where is that balance?”

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