Some background on RespondTV(formerly B3tv).
B3TV Developing Package For Enhanced TV Ordering
By GARY H. ARLEN, Senior Contributing Editor, September 7, 1999
TRI
Broadband developer B3TV characterizes its goal as creating "e-commerce for television." But its catchier and more memorable slogan, widely distributed in the start-up company's promotions, is "Interactive TV doesn't suck anymore." B3TV [the name is not an abbreviation, merely an acknowledgement of how difficult it is to find a standout name and accompanying uniform resource locator (URL) these days] has blended broadcast and Web technology for its version of interactive commerce through the TV screen.
The San Francisco, Calif.-based newcomer blasted into the broadcast world two weeks ago with an on-screen ordering test of that tried-and-true staple of interactive TV impulse ordering: pizza. Using B3TV technology for ordering and back-end processing, Domino's Pizza ran interactive commercials during a weekend "Star Trek" marathon on KBHK-TV, a UPN affiliate in the Bay area. Viewers who could see the Domino's on-screen offer could order "free pizza" through their Microsoft WebTV-Plus receivers or EchoStar DISHplayers. Neither B3TV nor Domino's is revealing how many of the company-subsidized pizzas were ordered via the hybrid online/broadcast arrangement; they acknowledge the response was relatively small given limited promotion and the restricted universe that could access the service.
Nonetheless, the test was considered a respectable proof-of-concept. It marked privately held B3TV's commercial debut and a revival of the long-promised quest to bring e-commerce to the TV remote control. More than a dozen ventures in the early and mid-1990s (ranging from TV Answer to Time Warner Cable's Full Service Network) sought to establish an interactive TV advertising model. None survived.
B3TV founded by former executives of America Online Inc. (AOL), MSNBC and Hewlett-Packard Co./VeriFone Inc. was established last year to develop an end-to-end processing system for TV ordering, using lessons from Internet shopping to speed up the procedure.
"The set-top box [STB] becomes the point of sale for television advertisers and programmers," said Todd Lash, vice president of marketing for B3TV. He said the system allows advertisers to get immediate feedback about their spots as well as capture information about respondents. The set-up surpasses "1-800" phone numbers or other direct-response techniques used with TV commercials.
At the National Cable TV Association convention in June, the company quietly debuted with demonstrations using the infrastructure of several broadband suppliers, including PowerTV (a Scientific-Atlanta Inc. technology offshoot) and Liberate Technologies (an Oracle spin-off, formerly known as Network Computer Inc.). B3TV's proof-of-performance efforts at that convention were housed in digital cable set-top boxes. Last month's over-the-air TV/Web TV tie-ins demonstrated another route for the on-screen ordering system.
David Kaiser, B3TV's founder and chief executive officer, told REC that the company expects e-commerce for interactive TV will be based on "impulse buying rather than 'mission-oriented' shopping," which is the premise for consumer Web commerce. Given the intermittent peaks of TV buying (i.e., driven by commercials or on-screen prompts), the system must be built to accommodate "low latency, not bandwidth," Kaiser added.
Full-Service Structure
B3TV is developing an e-commerce structure that encompasses data embedded in the TV signal, back-end reporting and analysis tools plus software to design and manage e-commerce events. The datacasting portion is compatible with the emerging Advanced Television Enhancement Forum (ATVEF) technology standard for on-screen presentation. Intel Corp. developed and manages the ATVEF, which is supported by several dozen broadcast and cable programmers and networks. It is seen as a credible standard that will attract advertisers to create interactive TV commercials that can be used across multiple set-top box systems. ATVEF plans to host a benchmark adopters meeting in Chicago, Ill., midmonth.
B3TV's patent-pending technology is based around a server farm to handle the waves of traffic expected from commercial-driven commerce. The underlying database can target on-screen enhanced messages keyed to demographic, geographic, behavioral or other variables akin to ads served on Web sites, and focused beyond even the most targeted TV commercials. Software creates usage reports on the fly, allowing advertisers and networks to identify the kinds of feedback they receive from individual enhancements. B3TV's technology supports multiple platform reception (ATVEF, WebTV, Liberate, Power TV) or individual platforms.
In the recent Bay area test, when the Domino's commercial aired, customers with an appropriate WebTV Plus or EchoStar box saw a banner at the bottom of the screen inviting them to order a pizza. By clicking on the banner, the customer could select a few toppings and crust style as the commercial played. The test was restricted to a handful of regional Domino's franchises that could process the Internet-delivered orders (although in some cases, B3TV grabbed the orders from the Web and dispatched them via fax to the appropriate Domino's store near a subscriber). An earlier, unpublicized technical test with SeaWorld theme park commercials enabled viewers to win a trip or to buy videocassettes from a commercial.
B3TV's technology accumulates usage information at its server site. In the August Domino's test, customers (who were all first-time users) had to type in their names and addresses via the WebTV wireless keyboard. Eventually, the ordering process for repeat customers will be reduced to a few clicks on the remote control. The WebTV box (including the one built into the EchoStar DISHplayers) automatically dials into the B3TV control center, which then dispatches the order to the appropriate vendor Domino's in the case of last month's test.
Others Exploring the Market
Several other companies also are exploring the hybrid broadcast/Web approach to couch potato e-commerce. Most notably, Wink Communications Inc., another Bay area enhanced broadcast packager, has deals in place with major broadcast and cable networks to offer on-screen enhancements. Wink, which had a successful initial public offering in August, also is an ATVEF supporter.
But Kaiser insisted that B3TV's advantage over Wink and other interactive TV products is his company's focus on a complete "selling solution." He pointed out that the remote control ordering action triggers a series of B3TV functions for reporting, fulfillment and targeting of future offers to that household.
The B3TV business model is built on fees from serving specific ads (or in this case, ad overlays) to target households. In some arrangements, Kaiser said he expects to receive a commission on individual sales, but he doesn't see that as the primary revenue structure in the near term. He expects B3TV' s initial customer will be the TV networks that can generate "enhanced CPMs" [cost per thousand] advertising rates with the interactive ads.
In addition, using STB addressability, B3TV's technology enables advertisers to "micro-segment" audiences, to target individuals in the household and to leave "cookies" in the STB, thus streamlining subsequent online buying sessions. Kaiser expects that micro-targeted on-screen ad enhancements could let networks (or local stations) charge up to fourfold more for such an ad, given the instant response capability. The arrangement also allows for what he calls "in-your-face" product placements, further targeting users and goading them to buy a product immediately; this would provide an additional impetus for in-store shopping.
For now, B3TV is handling video production and enhancements itself because ad agencies and independent production houses are not equipped to create the interactive TV on-screen enhancements. Among the company's plans are the development of tools that will be sold to agencies to create the enhancements. "Our model is to move over time to allow the agency to do [production] itself," Kaiser told REC.
Dependent on Set-Top Boxes
As several skeptics already have pointed out, B3TV, Wink and others seeking to develop interactive ad/commerce services are dependent on the rollout of cable digital set-top boxes. Until that infrastructure is in place, these packagers will be limited to hard-to-target users of WebTV or similar equipment. Nonetheless, Kaiser takes hope in the promises of digital STB rollouts, such as the one that AT&T Broadband Internet Services (formerly Tele-Communications Inc.) plans for several major cities this year. But Kaiser admits he is "totally dependent on cable companies' deployment of boxes."
Meanwhile, deals with cable operators and programmers continue. Kaiser said he is negotiating with a major sports programmer and expects to sign up at least one cable network by fall. He declined to hint at details about the B3TV network arrangement. Kaiser, a former AOL deal-maker, also claims that the fledgling UPN broadcast network wants to enhance its wrestling shows with interactivity. He said he believes the biggest near-term big opportunity is on enhanced sports telecasts. But "the real revenue in a couple of years" is from cable advertising (focusing on the unused "avails"), Kaiser added.
# # # |
