Here's an interesting article that disputes your claim (that ITV is all a sad joke, since that is the only claim you made - with no facts to back it up) -
Garden of Eden?
Cable operators cultivate interactive TV
By William F. Foley
Cablevision
5/7/01
Although the foundation of the struggling interactive television industry is being constructed at a frustratingly slow pace, the cornerstone application of what the cable industry hopes will one day be a mansion may turn out to be a humble garden—with a wall around it.
BSkyB, OpenTV and Canal Plus in Europe have made the walled-garden application the largest interactive model currently in use in the world. And with its cost effectiveness, low subscriber cost and potential for generating an impressive amount of new revenue for cable operators, the walled garden is now taking root in the United States.
The interactive application allows a cable subscriber to zip through Web pages, find information and transact business within the strict confines of a closed system (the walls) that appear to be compatible with other ITV applications such as specific content and advertising either by a partnership between a middleman and the cable operator or by the operator itself (thus the garden).
ITV companies such as Digeo, Source Media and Agency.com are currently betting their whole business model on the walled garden. At the same time, middleware providers like Liberate, PowerTV, ACTV, OpenTV, Canal Plus, Microsoft and WorldGate are incorporating the walled-garden model as a possible main portal for consumers to use to jump to other applications like e-mail, Web surfing, interactive program guide, personal video recorder or video-on-demand.
''The walled garden today as a concept is not an entity; it's an approach to the business,'' said Michael Collette, former vice president of marketing and business development for ICTV and current president of Northridge, Calif., ITV consulting firm Mediastrategies.
''In 1997 or 1998, when the term 'walled garden' was first put forth, most of us found it kind of frustrating and didn't like it very much, because it sounded so limited and it sounded sort of defensive,'' said Collette. ''But as time wore on, the walls turned out to solve a problem, and that problem is the boundless nature of the Internet marketplace. The garden was accurate as well, because we will grow from a garden to wide open field in a few years.''
Unlike personal video recorders and interactive program guides, the other two basic applications that are fighting it out to define themselves as ''the'' television portal—or the first screen that a consumer would see or the central point for initiating interactively through a menu button—the walled garden may be adopted first for the simple reason that it's easy to understand.
''A walled garden is a familiar environment that people can get accustomed to easily,'' said Adi Kishore, analyst in media and entertainment strategies practice for The Yankee Group, Boston. ''There is a certain comfort in pulling this screen up and looking for stocks, e-mail, whatever. It becomes ritualistic, especially on a local level. Also, as far as the bottom line is concerned, in all three portal ideas (PVR, IPG, WG) we have this ability for the local operator to sell advertising as a revenue source. But from a practical standpoint, the PVR, and IPG, is less likely to give the local operator control over advertising.''
The Pitch
Walled-garden proponents claim the application allows local operators and MSOs the ability to form lucrative new advertising partnerships as well as leverage existing ad contracts by offering banners or video ads that jump to current programming, VOD clips and PVR functionality, among other scenarios.
''In the case of many local businesses that may not be very technically savvy and reluctant to have a Web site,'' says Walt Ciciora, a senior tech consultant for CTAM, ''it is possible to offer them a site on the walled garden. And as long as they keep advertising with the cable MSO, that site stays up within the walled garden.''
Local ad sales personnel, predicts Michael Kokernack, president and CEO of ITV media buying firm BackChannelMedia, will be among the biggest boosters of the walled garden.
''Initially it will be a value add to a regular spot buy,'' Kokernak says. But ad models, he says, will evolve and echo recent trends found on the Internet. ''Later, I think there will be two ways it will develop: I think you'll find pricing that's based on exposure and pricing based upon the transaction—or a hybrid of both: basically, blended revenue based on impressions and transactions. In banner ads, the click-through rate has dropped, so there is still a value to the exposure or impressions.''
Many walled gardens also offer the subscriber the ability to self-service their account: adding or subtracting services, checking their balance, in the future even paying it directly.
And, proponents say, the walled garden is the perfect environment for operators to sell subscribers their own products such as cable modems, telephony services, digital upgrades or VOD. What's more, operators may be able to open up their own shops and create walled garden ''malls'' with local vendors and distributors.
Insight into the Garden
Talk to anyone about an interactive walled garden, and one name will pop up again and again: Insight.
Working closely with Source Media in Dallas, Insight Communications has been offering a walled garden experience called LocalSource for the last two years with great success, running it and a VOD system from Diva on the Motorola DCT-2000 set-top box by combining several applications into one headend.
Though ad revenue from LocalSource has not yet become a central part of the bottom line for either Insight's 17,000-subscriber Columbus, Ohio, system or the 14,000-subscriber Rockford, Ill, system, the service is proving to be an invaluable testing ground for the walled garden.
''LocalSource is the place for local information,'' gushes Bill Gilbert, vice president of advertising sales for Insight Media Advertising. ''I can go there right now, for instance, and go to dining, or find out when the movie I want to see is playing,'' said Gilbert. ''I think local is where ITV is going to be advertising-driven. One thing I don't want you to do from the advertising perspective is leave my medium. I want you to stick around and stay on the tube.''
When the service started out, Gilbert and his team went out and recruited five steady cable advertisers to bring on board. Since that time, the MSO has slowly trimmed the garden from one chock-full of sometimes useless information to a streamlined experience giving consumers quick access to what usage meters have shown they like best.
These areas include movie listings, restaurants, weather and local news. Gilbert gets even giddier when he talks about the possibilities of national sponsorships trickling down to local businesses.
''I think the most important thing that we are finding out is what people are using,'' Gilbert says, noting that usage data streams in every 15 minutes or so. ''We have thrown a lot at them, but we are narrowing it down to what is useful to them.''
Most importantly, Gilbert says, the walled garden's effectiveness as a promotional tool makes it cost effective even without advertising revenue. ''We're using it to get people to pay $6.95 to upgrade to digital. LocalSource is just a great added benefit. It keeps them on the television.''
Planting the Seeds
Ranjit Sahota, CEO and founder of walled-garden provider MetaTV, maintains that the application can reduce costly digital churn. ''Once a subscriber gets used to this type of service, it creates a stickiness factor: Even if they don't produce a revenue stream, it can stop digital churn,'' Sohota claims. ''This has been proved out by Insight: They were experiencing the average digital tire churn—somewhere between 25 and 50 percent, and they were able to reduce that by something like 60 percent by adding the walled garden.''
The walled garden is a lighter application than one that would allow for full Internet access, because it does not require the MSO to maintain a completely open Internet connection to the subscriber. The server handling the load can be located at the headend, thus reducing outside ISP charges, while still giving the subscriber a taste of the Internet.
''The walled garden is a cost reducer in that the more time a person stays in a walled garden the less demand they put on the connection to the Internet,'' says Ciciora. ''The response time to the walled garden is also faster because it is in a local server and maintains the impression that the cable modem is working very well, thus also adding to the value proposition of having a cable modem. By relaxing some of the access problems to the Internet by keeping people within the walled garden, you give them faster response, which gives them more satisfaction.''
Walled-garden advocates say the application is the ideal introduction to interactivity because E-mail, Web surfing, IPG, PVR , VOD and other interactive applications can be added on slowly and be just additional features in an already familiar environment. ''On the early set-top, the walled garden may end up being the guide plus VOD, and that's it,'' Collette says.
''Though cost is still prohibitive for many local operators,'' says Rodney Bickel, corporate director of technical operations for Charter Communications, ''the walled garden seems like the cheapest way to start.
''Just like anything else, as it gets up and going and it gets more familiar, then the price of creating that content, the equipment, all of those things will come down to make it more affordable—and it could become a part of the local rate card out there. ITV companies are probably another year away.. But the walled garden seems to be the place where ITV will get its start.''
Collette agrees: ''There is contention among multiple applications for that space...We will spend a lot of time sifting through what products have the best use of bandwidth, and what products will go first because of the value they bring the MSO and their core business.'' Judging from that statement, the garden is indeed being fertilized and ready to grow. |
