Hi Poet,
I am sorry for not getting back to you sooner. I think that this article sheds some light on our questions, especially the quote "Whatever you think about Wink now or Microsoft or WorldGate (WGAT: news, msgs) or the million other companies that you hear about out there, this is just the beginning," said Fisher. "This market's going to reconfigure itself a dozen times over the next couple of years. The winners have not been declared."
Another interesting quote concerns the partnering between these companies: "What we've tried to do is to put together the type of relationships and type of platform deals that enable us to integrate," she said. "So even though a Microsoft and an AOL and a Liberate are competitors, we're partners with all of them."
I will continue to dig for more - especially your OpenTV questions...until then, thanks for the kind words.
Good luck,
Eric
A Wink to the future of interactive TV
Company aims to keep television a 'lean back' habit
By Kristen Gerencher, CBS MarketWatch
Last Update: 2:46 PM ET Feb 29, 2000
Market Snapshot
Research Alerts
ALAMEDA, Calif. (CBS.MW) -- Wink Communications wants to add
an "e" to couch potato -- e-commerce that is.
The attempt isn't just armchair philosophy, but a
concept that's already starting to click. Want
sports statistics during the game? Hit the select
button. Want to know the weather for your
business trip tomorrow? Catch local predictions
with your remote.
That's the kind of refined channel surfing that
Wink (WINK: news, msgs) is hoping viewers
will embrace as competition accelerates in the
growing interactive television business.
"This is a very early stage company that has a
tremendous number of risks, not to mention valuation which is certainly
very high by any traditional measures," said Larry Marcus, an analyst at
Deutsche Bank Alex Brown. But the valuation of about $1.6 billion "does
not make it uncommon from great number of other companies that are out
there."
Wink's service is already available in nearly 140,000 American homes as
well as in Japan. The "I" icon that appears in the corner of
Wink-enhanced commercials and television programs is now flirting with
consumers in 12 markets who are wired through their advanced analog or
digital set top boxes.
The company, which calls itself a low-cost end-to-end e-commerce
enabler, projects it will be in 3 million households by the end of the year
with the help of a strategic partnership with DirecTV.
The opportunity certainly looks big enough. Forrester Research has
estimated that interactive television will generate $11 billion in advertising,
and $7 billion in commerce by 2004.
Stocking profits
So far investors
appear to be wagering
that Wink will be one
of the winners in the
interactive television
wars. The company
faces a variety of
potential rivals,
including Liberate, Microsoft, and most directly privately-held
RespondTV.
However, if CEO Maggie Wilderotter is worried about losing market
share, she doesn't show it. "At times consumers will surf the Web, at other
times they'll simply watch TV and at other times they'll watch television
and interact with Wink," Wilderotter told CBS.Marketwatch.
Wink went public in August 1999 at $16 a share. It's since traded as high
as 75 and as low as 21 3/4. It closed last week at 52 5/8. Shares slid
back from their all-time highs in mid-February after the expiration of a
lockup on some shares.
The company met Wall Street's fourth-quarter expectations for a loss of
15 cents a share. It had $1.6 million in revenues for 1999 and is set to
collect transaction revenue of $1.50 to $3.00 per click from advertisers in
the spring, according to analysts. The company expects to move into the
black in the first quarter of 2002.
Neutral player
Wink is trying to appeal to
consumers by requiring very little
from them. It's a free service to
viewers and they don't have to
exchange or buy new hardware to
join the next wave of enhanced
television and "T commerce"
(television-based e-commerce.)
Wink also tries to make it easy for broadcast networks, cable operators
and satellite services to add its offerings with a flexible software package.
Not one to avert its corporate eyes, Wink has forged partnerships with
some heavy hitters in the burgeoning sector, including Philips (PHG: news,
msgs), Liberate (LBRT: news, msgs), America Online (AOL: news,
msgs), and Microsoft (MSFT: news, msgs).
Wilderotter describes the company as playing a "Switzerland-type role,"
and calls the partnerships one of the "beauties of the Wink business
model."
"What we've tried to do is to put together the type of relationships and
type of platform deals that enable us to integrate," she said. "So even
though a Microsoft and an AOL and a Liberate are competitors, we're
partners with all of them."
Microsoft invested $30 million in Wink last year and will use the company
for back-end processing for their WebTV products. The deal gave
Microsoft a 10 percent stake in Wink.
Larry Marcus said that while Microsoft has a "history of eating their
young," he thinks the pact with Wink is positive.
"We don't know exactly what they have up their sleeve, but certainly in
the first round here they've chosen to invest in and deploy Wink versus
trying to do it themselves," he said. "Wink's focus here is very strong and
differentiated."
It's not just manufacturing that comprises Wink's portfolio of partners. The
firm is developing enhanced ads with Charles Schwab (SCH: news,
msgs), General Motors (GM: news, msgs), Unilever (UL: news, msgs),
Kraft (MO: news, msgs), Disney (DIS: news, msgs), and Clorox (CLX:
news, msgs). Nearly 1,000 Wink-enhanced ads aired in the last quarter of
1999.
Rival player
One of Wink's top competitors is San Francisco-based RespondTV, a
private one-and-a-half year old company. RespondTV ran a local market
trial through a Domino's Pizza commercial last year. RespondTV
president Richard Fisher said the firm processed 150 TV-based pizza
orders which were delivered in half an hour. To date, Wink has focused
more on major national advertisers but expects to add pizza offerings in
the third quarter.
Another difference is that RespondTV is unbranded and requires a box
that runs Microsoft's WebTV, PowerTV, or Liberate software. Fisher
estimates RespondTV is currently available in 600,000 U.S. homes.
"Whatever you think about Wink now or Microsoft or WorldGate
(WGAT: news, msgs) or the million other companies that you hear about
out there, this is just the beginning," said Fisher. "This market's going to
reconfigure itself a dozen times over the next couple of years. The winners
have not been declared."
Betting on couch potatoes
In December, Donaldson, Lufkin & Jenrette
predicted that interactive television will turn "couch
potatoes into mouse potatoes."
For all of Wink's corporate architecture, that's the
real test. The firm is betting on viewers' familiarity
with other interactive TV experiences such as
pay-per-view movies and sporting events or home
shopping.
The challenge of inducing viewers reclining in their
lounge chairs to become more active hasn't been
lost on Wilderotter.
"We're very conscious of television viewing habits
of Americans today, and that's a very lean-back
experience," she said. "With Wink, simple
one-click interactivity doesn't take them into a
lean-in environment where they have to work at
watching TV."
Marcus said he's satisfied that viewers reared on video games will do
more than just tune in, allowing e-TV to take off. "This is not in any way
an 'if.' It's only a 'when.'"
The other advantage is that Wink, now present on 31 networks, has
permeated the channels consumers are already watching, said
Wilderotter.
Scale and risks
As a nascent company, Wink has limited analyst coverage.
Bear Stearns' Adria Markus has an "attractive" rating on Wink.
"Management is very strong," said Markus. "Their ability to see where
others in the industry are coming from and try to play to those drivers,
whatever it is those drivers are for those key players, is very impressive."
Meanwhile, Larry Marcus upgraded the stock to a "buy" after seeing
Wink's new offerings at the Deutsche Bank Alex Brown
broadband/enhanced TV conference in mid-February. "I had a good
feeling about their momentum," he said, noting particular support for the
new real time WEB Link feature that will host URL links from the
television to the viewer's set top box in an action akin to bookmarking on
a Web browser. The firm describes it as having a mini Web page with
HTML content on top of television video.
Marcus was bullish on the addition of WEB Link. "I thought that was not
only an attractive model but also answered a couple key questions about
the company's future," he said. Marcus noted that TV e-commerce faces
a threat from broadband technology, which may make it possible for Web
surfers to view high-quality video on their computers and avoid TV
altogether.
Another question yet to be answered is how well Wink's system can stand
up under heavy traffic.
Wilderotter maintains the company can handle 10 million transactions a
day.
That's about 115 winks a second, no small potatoes. |
