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4 million subs by the end of this year
7/26/00 11:58 pm
Hal Krisbergh, CEO of Worldgate, briefed us on his joint venture with Charter, Cox, Comcast, and Adelphia -- cable operators that control 24 million subscribers, 36% of the US total. Their TVGateway interactive television (ITV) platform, going live later this year, will:
Ease rollouts of money-making ITV applications. By providing an open, Internet-based application platform, TVGateway will make it easier for operators to roll out video-on-demand (VOD), interactions with video, program guides, and walled gardens of operator-controlled content and commerce pages.
Build on Worldgate's thin-client Internet software. Because the bulk of Worldgate's software runs on the server side, TVGateway doesn't require operators to deploy high-powered boxes like the Motorola DCT-5000. The platform will run on the 4 million low-end digital set-top boxes that we project will be in place by the end of this year.
Be cemented by a $24 million investment in Worldgate. The same four cable operators will invest in Worldgate and commit to deploying its Web-browsing software on subscribers' digital set-top boxes.
TVGATEWAY GETS ITV OFF THE GROUND
With this deal, cable operators can finally go head-to-head with satellite operators DirecTV and EchoStar, which are now aggressively launching ITV systems like OpenTV and Wink. Building on TVGateway's open platform, cable interactivity will leave the tarmac and vault skyward with service- and revenue-laden packages of interactivity. TVGateway:
Clears interactive program guide (IPG) hurdles. While guides are an essential element of an operator's ITV package, operators have been foiled by litigious Gemstar/TV Guide, which sues all guide innovators for patent infringement. No more. Backed by four deep-pocketed cable operators, TVGateway will build an IPG that skirts Gemstar/TV Guide's patents, facing down the inevitable lawsuit.
Allows its partners to share learning. Because of their separate geographies, cable companies don't compete. Charter and its partners will observe each other's VOD and walled-garden experiences, swap best practices, and license each other's code built on the TVGateway framework.
Gooses AT&T and Time Warner Cable. AT&T's current strategy is to deploy the Microsoft TV platform on high-end digital set-top boxes. But as ITV takes off, AT&T will likely deploy TVGateway on its millions of lower-end digital boxes. Time Warner execs will have to convince their new owners at AOL that waiting to deploy top-heavy AOLTV will slow development of ITV revenues.
PREPARING FOR THE ITV TAKEOFF
The ITV plane is boarding -- advertisers and networks should take their seats.
Web sites must angle for walled-garden slots. Sites like Amazon.com and weather.com should move now to get into walled gardens like Charter's. As with BSkyB's walled-garden partners in the UK, those signing on early will gain both experience and significant revenues from captive traffic.
Advertisers must target multiple platforms for interactive commercials. We recommend experimenting with three viable lead-generation platforms: 1) Wink to reach DirecTV and EchoStar subscribers; 2) RespondTV to reach AT&T cable households; and 3) Worldgate's Channel Hyperlinking for Charter, Cox, and Comcast homes. Costs to enhance commercials for any of these systems remain low. Advertisers like local auto dealers must start now to gain experience in maximizing yield and return on various interactive video platforms.
Networks should use competition to push for standards. ITV won't take off without NBC, Discovery, and CNN. Networks should use their leverage to push for workable ITV standards and tools. They should pit competitors against each other, driving them toward a solution with the simplicity of Wink, the real-time return of Worldgate, and the flexible tools and customized offers of RespondTV. |
