The Future of Interactive Television: Report From Two Alternate Universes

Recently, I had the pleasure of visiting two alternate universes.

The first was the very heart of the ad industry, the American Association of Advertising Agencies’s (AAAA) Media Conference in Orlando, FL. Appropriately held at Disney World, this conference was the domain of the Big: Big Agencies and Big Media.

The second universe was smaller and friendlier: the Entertainment Technology Alliance (ETA) expo in the confusingly quaint Pasadena Conference Center. Here, techies held sway, demonstrating everything from digital post-production procedures to 3-D games to digital entertainment convergence products of every stripe. The emphasis seemed to be on the artist, the creator, the digital manipulator… in short, the small companies that make the magic happen.

Being different universes, opinions varied wildly on certain subjects. The one that came up repeatedly was digital television and convergence.

The Big Agency and Big Media people at the AAAA conference think they’ve got it all figured out. (Note: To get the most effect out of the following quotes, speak them aloud in a self-congratulatory, smug tone). “Ha ha ha!” they intoned, “Looks like that whole Internet thing didn’t really work out! We could’a called that one!” (no mention of the fact most of them jumped on the bandwagon with millions in investments during the most rapid bubble expansion). In addition, they had lots to say about convergence, digital TV, and new technologies such as TiVo: “Ha ha ha!” they chortled, “Nobody’s buying those PVR things! What a bust! Advertising and television are safer than ever!”

The techies at the ETA couldn’t have disagreed more. “TV’s dead!” was the rallying cry, “TiVo’s going to kill it! Interactive TV is the wave of the future! Pretty soon our TVs will be our computers, Internet connections, gaming centers, personal valets, and babysitters!”

OK, I guess to some extent the “babysitter” thing has already happened. But still…

Two very different opinions from two very different groups. What are marketers to make of it all?

There’s no question that convergence of some sort is on the way. Broadband, that high-speed connection that makes true convergence possible, made great strides in becoming mainstream in 2001, with over 10 million homes signed up in the U.S. according to Jupiter. Gaming consoles are connecting: Both Microsoft and Sony are introducing multiplayer gaming this year. Jupiter says by 2006, more European households will be watching digital TV than will be using the Internet. Add in the soon-to-be reality of TiVo functionality built into new televisions and the interest cable companies have shown in developing Web capabilities in set-top boxes, and you’ve got all the makings of Internet/television convergence that could change the way we live.

As all this comes together, distinctions between the Web and TV will blur. TV will become more interactive and more viewer controlled. As marketers, we’ll have to deal with this reality by radically changing the way we communicate in these different media, right?

Maybe. I’m not so sure.

In the midst of all the future-speak and nay-saying, one voice stood out. It belongs to Marcia Zellers, director of enhanced television for the American Film Institute.

Zellers put it very simply: “Some of us are good storytellers. Others aren’t. Sometimes, those of us who are good storytellers want stories told to us.”

In other words, sometimes we just want to veg out and watch TV. Sometimes we want to direct the experience. Simply put, sometimes we want mindless entertainment and sometimes we want to work for (or with) it.

Over the years, television consumers have indicated a desire to increasingly control their experiences. From remote control to VCR to TiVo and now (possibly) to iTV, consumers seem to want to be in control. On the Web, even after the bust, the amount of information, interactivity, and interaction available to most consumers is still pretty astounding. Online gaming is becoming a major force. Net usage continues at an all-time high. Are you using the Web less than you did a year ago? I doubt it.

What does this mean for future convergence? Will the TV and computer meld in our living rooms? Will advertisers have to worry digital TV will kill the 30-second spot? Must online marketers abandon everything they’ve been doing and move to new TV models? Will convergence kill TV? The Web?

Probably not. A recent Gartner study in Europe found 94 percent of interactive TV customers haven’t bought anything through their TVs. An astounding 35 percent say they’re not interested, and 40 percent say they haven’t figured out how to use iTV services yet. The story’s worse in the U.S.: Consultancy Knowledge Networks found over 70 percent of U.S. consumers weren’t interested in interactive TV services, even if they could get them.

It probably makes sense. Although a technical possibility, iTV may be the classic solution in search of a problem. People like the Web. People like TV. There’s nothing to support a move to smoosh them into the same box. There may be a trend toward increased consumer control over the TV, but it’s control over when to watch, not over the experience of watching. Watching TV and surfing the Web are very different experiences, that’s why we do them on different machines.

With the level of noise I heard from both worlds I visited, we can be damn sure we’ll hear a lot more about iTV and convergence over the next year. Big Media sees it as a way to kill “that Internet thing” and seize control again. Entertainment techies think it’s all pretty damn cool. But will Mom and Pop buy it? Nothing says they will.

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