EXPERTS SAY INTERACTIVE TV PROFITS STILL ARE YEARS AWAY
LOS ANGELES -- Despite current pessimism about finding interactive TV (iTV) business models that can generate immediate profits and current retrenchment from Internet by NBC, ABC and other media giants, speakers at Myers Forum on iTV and entertainment here Wed. voiced optimism that enhanced interactive TV would become mainstay in U.S. homes by 2006.
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Liberty Digital CEO Lee Masters said he had been around for rise in both FM radio and cable TV, and said iTV and T-commerce (TV-based e-commerce) had greater long-term potential. But he said industry needed to learn that “ITV is not the Web on TV,” predicting that revenue would spread over multiple streams including T-commerce, video-on-demand and rich media-based micro- targeted interactive advertising. TBS Exec. Vp Dennis Quinn said use of games, quizzes and other contests could drive up viewer participation in enhanced TV broadcasts. While citing statistics that predicted more than 50 million consumers would use both TV and Web-surfing PC simultaneously this year, Quinn said advertisers and consumers must be educated about uses and benefits of enhanced TV. TBS strategy of continuing to show televised NASCAR races in small box on screen during ad breaks met with resistance from major advertisers worried that size of their ad had been diminished, even though strategy boosted viewer retention, Quinn said.
Forum also featured healthy dose of economic reality as most panelists admitted profitability for most iTV efforts still was years away. Game Show Network Exec. Vp Jack Tauper said: “Right now it’s not a business, it’s an expense.” Lehman Bros. Senior Vp Glenn Schiffman advised companies in iTV industry to concentrate now on simple survival rather than growth over short term until installed base grew and Wall St. rebounded.