miniwebinteractive

The changing economics of interactive TV, and why it now makes good business sense

Making interactive tv

affordable

Contents

3 Introduction

Lessons from the past

5 Broadband not broadcast

Cheap content authoring

6 What! Not HTML?

7 Low cost of deployment

Generating usage

8 Affordable interactive TV – NOW!

What is the future of interactive TV?

9 Conclusion

11 Contact

2

3

Introduction

Interactive TV has been a success in various ‘niche’,

high value applications such as TV betting and

interactive advertising, yet despite these successes

it has failed to enter the mainstream, largely due to a

combination of commercial and technical barriers that

have prevented its widespread adoption.

These barriers are now rapidly crumbling and a new era

is emerging, where the very nature of TV is networked

and interactive. This future sees TV move towards

a social, community driven, empowering, deeply

entertaining and engaging TV experience which has

interactivity at its heart.

The basis of sustainable interactive TV is in the changing

economics. The addition of IP connections into TV devices

has the potential to bring the economics of the internet to

the entertainment and interactive TV industries.

It is all about value. Content owners, TV network

operators and advertisers all need to see a return on

their investments in interactive TV. Consumers need

to be linked up to appropriate services, and see

increasing benefit from their use, which enhances

their TV experience.

Changing the economics associated with interactive

TV requires:

1. the costs of service creation and deployment to

be driven down to web-based levels

2. usage to be increased, delivering greater

consumer appeal

3. integration with core entertainment propositions

Services that are expensive to build and run and are

deployed to a small number of devices are ultimately

doomed to failure. However, services that can be

developed cheaply, deployed widely, operated at low

cost, and associated with TV audiences to generate

traffic, can make real economic sense.

This paper examines the past, present and future of

interactive TV and the significant changes that are

happening right now, which will make interactive TV

so affordable, and so ubiquitous, that it could well

represent the next ‘big thing’ in consumer interaction.

Lessons from the past

The first real appearance of interactive TV was in 1959,

with the introduction of the telephone call-in. Since

then, these services have gradually developed into

what we see today. Although not usually recognised

as ‘interactive’, a large quantity of TV programming is

designed for, and relies on interactive opportunities for

revenue, augmenting traditional TV subscription and

advertising models.

Hardly a show goes by, or a channel visited, where a

URL, phone number or premium text service is not

presented on screen as a mechanism for audiences to

respond to the TV.

Once the economics of on-screen interactive TV can

compete with telephone, SMS text services and web,

while delivering greater interactive margins to the

broadcasters, most of these services will migrate onto

the TV itself.

Recent studies have shown that ‘single screen’

audience participation can be as much as four

times higher than ‘two screen’ web or mobile based

interaction, offering broadcasters higher response

rates and higher margins.

Interactive TV therefore has proven benefits for content

owners. It enables a deeper relationship between a

broadcaster and its viewers. Viewers who interact spend

longer with the channel brand when they are guided to

entertainment-focused applications that are relevant

and compelling. Calls to action based around on-air

programming also drive traffic to revenue-generating

applications like betting, retail or competitions.

Media content to consumers - Today

Studios & Production

& UGCDTT

Internet

Broadcasters

Consumer

Consumerin Study

Advertisers use iTV to turn a 30 second commercial

into an extended and possibly two-way interaction with

their target audience, increasing brand involvement and

generating direct sales.

Whatever the motive for interacting with audiences,

until now, the opportunity has been limited to the

best resourced broadcasters, channel owners and

advertisers. It has cost as much as £1 million to build,

test, deploy and deliver major interactive television

services and £10,000 a month operational costs are

typical. Such a high cost-base has been a major barrier

to entry, inhibiting the growth of interactive TV as a

market segment.

Today, with both digital TV and broadband being

commonplace in UK homes, the possibilities of

interactive TV are almost limitless. However, digital TV

and broadband are two separate technologies that have

both now reached mainstream but have yet to converge.

Digital TV initiatives, in satellite, cable and terrestrial

forms, were designed and deployed independently

of broadband; they therefore rely upon broadcast

technologies as a means to deliver interactive

applications and content.

This use of broadcast to deliver interactivity has resulted

in many proprietary interactive platforms and expensive

spectrum being used for its delivery. This has had a

direct effect on the cost of iTV content creation and

delivery, making an interactive service as expensive as

running a small TV channel.

The lack of interoperability means that deployment and

development costs remain high, partly due to the need

to create bespoke broadcast iTV applications for

each distribution platform/middleware used, and partly

because of the costs of getting the applications ‘on air’.

To reach all viewers in the UK alone would require 3-5

separate authoring projects for satellite, cable, DTT

and multiple IPTV services, plus transmission and

deployment costs. Lack of competition for application

authoring within each middleware means programming

costs are also kept high for each iTV environment.

These traditional broadcast interactive TV applications

lack the power and sophistication of internet-delivered

interactivity. So many content owners using iTV

have also built video-enabled websites that deliver a

more compelling two-way, personalised and targeted

experience for PCs. In a broadband TV world, this is a

duplication of effort, as they are often targeting their

television audience with both an iTV and an online

service, but moving their audiences away from the

TV device.

However, broadcasters recognised the value of iTV and

it was quickly learned that if you can drive enough traffic

through an interactive application, it can be made to pay

for itself, and the ‘red button’ was invented as a means

to directly tie a TV audience to a contextual, relevant or

convenient service, and thereby drive up usage.

It is interesting to note that when Sky moved towards

red button services, it also moved towards the use of

an interactive TV technology that could re-use internet

content and infrastructures, and thereby minimise the

use of interactive bandwidth and service authoring.

Sky’s micro-browser model not only allowed red button

services to seamlessly emerge, pushing up traffic, but

simultaneously reduced the cost of content creation

and hosting by pushing it back onto the industry’s web

servers where it belonged. These two factors were

instrumental in making Sky’s service a commercial

success, and are lessons which need to be applied

as the industry evolves in the future. However, if the

technology had remained exclusively within Sky,

the problems of interoperability and cross-platform

development would still exist.

4

“services that can be developed cheaply, deployed widely, operated at low cost, and

associated with TV audiences to generate traffic, can make real economic sense”

Broadband interactive content - enables all

Studios & Production Companies

& UGC

DVD

Cable & Sat

DTT

IPTV

Broadband TV

Channels &Broadcasters

Web media aggregators

Consumerin Lounge

IP EnabledTV Devices

&DVD

Players

Interactive TV content delivered over IP

5

From past experience the following is clear: for

interactive TV to become mainstream and affordable

for all content owners, a number of key issues need to

be addressed:

1. Interoperability

for maximum reach, services need to be authored

once and deployed across multiple types of TV

distribution networks

2. Low cost content authoring

TV Site authoring must be in line with web authoring,

and re-use internet infrastructures and content

management systems

3. Low cost of deployment

services need to be made available independently of

expensive testing and transmission bandwidth costs

4. Consumer usage

to drive traffic, there must be cross platform,

ubiquitous mechanisms to associate TV audiences

with a service

5. Consumer appeal

services must be fast, robust, entertaining, easy-to-

use and contain video entertainment and rich content

wherever possible

Fortunately the convergence of broadband and

broadcast, as well as other significant developments,

means these issues are being addressed right now.

Broadband not broadcast

The future lies in the ability to deliver interoperability

across multiple networks, and to make the services

available ‘on line’ rather than ‘on air’.

Broadcast interactive TV can never be standardised

across different proprietary TV distribution networks

and devices. The key to allowing broadcasters

and programme makers to gain all the benefits of

interoperability lies in the use of broadband

networks to deliver the interactivity instead of the

broadcast spectrum.

Using broadcast bandwidth to deliver iTV applications

and data is an expensive and inefficient method of

delivering iTV services. Repeatedly transmitting data

from a carousel every few seconds in the hope that

someone may want to use it served its purpose when

there was no alternative, but there is now a much

better way to deliver applications and interactive

content: broadband (or even narrowband) bandwidth.

High-end satellite set-top boxes are now starting to

ship with ethernet ports so that they can be hooked up

to a home network and a broadband connection. Cable

(DOCSIS enabled) and IPTV set-tops can also access

the internet and later this year broadband-enabled

Freeview receivers should appear in UK retail outlets.

As a result, IP connectivity is now a realistic solution to

delivering iTV applications and content across all

TV devices.

Cheap content authoring

Having IP connectivity is not enough in itself, there

needs to be an authoring format that will bridge the gap

between TV devices and internet content management

systems and infrastructure.

This simple mark-up language already exists. The XML

TV microbrowser format, developed by the Miniweb

founders while they were at Sky, was published via the

European Telecommunication Standards Institute (ETSI)

in 2004 as an ETSI technical specification TS 102 322;

the ‘worldwide TV Mark-up Language’ (wTVML). Miniweb

is now able to supply the reference implementation of

this standard to the industry on a royalty free basis on

various TV device types.

This format is the only commercially successful

interactive TV system based on internet protocols and

infrastructures, and has great relevance to the new world

of broadband-enabled devices.

It is currently being enhanced to support next-

generation features, which will later be re-published via

ETSI as TVML 2.0

What! Not HTML?

Many wonder why the same content formats used on

the web are not appropriate to be re-used on TV. Despite

seeming to be an obvious solution to TV Site authoring,

HTML/Javascript solutions have failed to deliver on

almost every front.

The problems associated with using web technologies in

a TV environment are now fully understood by operators.

The main issues are:

• Web technologies do not deliver interoperability; the

formats are not standardised for TV and cause more

fragmentation when adapted for different devices and

networks, rarely resulting in portable services

• Many digital TV network operators have already

deployed millions of devices not capable of running full

web browsers, but capable of running wTVML services,

thereby delivering further interoperability

• Rather than reducing authoring costs, creating sites in

web dialects is often more work than in a TV friendly

format like wTVML

• TV network operators continue to white list only

those services which they have manually tested for

their devices. This testing process adds cost to the

deployment of every service or site authored in HTML

or JavaScript. This effectively prevents a ‘open’ system

and forces operators down a ‘walled garden’ model

The wTVML mark-up language is a strict XML format for

TV which is now being updated to support broadband

video, HD and various user interface effects, transitions

and objects. Since it works across the widest range of

TV network and device types, both new and traditional,

it provides the ‘Biggest Bang for your Buck’ for content

owners authoring interactive TV services.

For TV network operators, this format offers access

to the widest range of internet derived content, as

the network benefits from content already authored

to the standard.

It should be emphasised that TV Sites are not websites.

They use the internet as a network, use standard

protocols such as http and they share the same servers

as websites, but their pages are not designed or built

for the PC environment. Typically a TV Site is a subset

of a website, where the applications/content have been

authored in wTVML specifically for display on a

television set - the same principle as re-authoring for

mobile devices.

By using internet infrastructures and protocols, re-

publishing or re-using content available on the web and

accessing full transactional capabilities via web servers,

we are seeing the cost of iTV content creation dropping

to the same levels as simple web authoring1.

It stands to reason that if content owners are already

creating interactive web destinations for the PC

(traditional web delivery), they will invest a small

incremental spend in development costs to re-use the

content on a TV. The most expensive web infrastructure,

from servers to content management and transactional

systems, can be shared across both sites. For website

owners not currently running interactive TV services,

this new delivery model represents a very cost-effective

way to target a mass-market television audience.

Competent web programmers can learn to use wTVML in

around three weeks and there is already a 1,000 strong

developer community registered and learning about

this programming environment, ensuring the benefits of

competition, innovation and shorter design cycles.

wTVML is a highly efficient programming solution for

television display, requiring 5-10 times less code than

HTML or Javascript to achieve the same purpose. It

also uses a multi-page transmission model, allowing

one request to retrieve multiple pages or scenes,

resulting in extremely fast user interactivity. This

approach reduces server requests by up to six times

compared to applications built upon HTML and helps to

preserve a good quality user experience in heavy load

situations. It also reduces server capacity requirements

for internet-based interactivity when compared to

alternative approaches.

6

“the future lies in the ability to deliver interoperability across multiple networks, and to

make the services available ‘on line’ rather than ‘on air’”

1 Miniweb has partners that will build and host a static TV Site for an SME for as little as £200/year

7

The original form of the ETSI approved wTVML authoring

language has been used on the BSkyB satellite platform

to enable narrowband IP interactive TV delivery into

standard set-top boxes. This approach to interactivity,

and the way it has encouraged low-cost, third-party

application development, is a key reason why Sky has

bucked the worldwide trend by operating a profitable

iTV platform.

Low cost of deployment

Another benefit of interactive applications created using

wTVML and delivered over IP is the ability to test them

automatically, using a simple online robot tool, similar to

the web spiders used by search engines. This automation

is not possible for today’s broadcast iTV applications or

those authored using HTML or JavaScript.

Auto-testing represents a significant saving in both cost

and time-to-market. Where an old-style broadcast-based

application might take months to be formally approved by

a network operator, wTVML services can be automatically

tested and deployed in one hour.

Deploying interactive content over broadband, instead

of via expensive broadcast spectrum, uses bandwidth

already paid for by the consumer and so avoids the need

for carousel-driven, over-the-air data downloads and the

expensive iTV bandwidth they ride upon.

Devices that are already equipped with HTML/JS browsers

are not left out when a TV Site is authored in wTVML. Due

to the declarative nature of the XML used in wTVML, the

Miniweb platform is able to transform a TV Site written

in wTVML dynamically into various dialects of HTML/

Javascript for display on these devices.

Therefore, via the Miniweb platform, iTV developers can

re-publish their web content and re-use their internet

infrastructures to build new and compelling applications

for a television audience, delivered to the widest range

of TV devices.

For a content owner, comparing this solution to the

broadcast solutions of yesterday, it really is a whole new

world - interactive TV content is authored at a fraction

of the cost and now sitting on a web server, effectively

deployed for free. The service can have a longer life space

and be available for ‘long tail’ access from recorded or on-

demand entertainment content.

Generating usage

Reducing the cost of content creation, distribution and

operations is one thing, but what about the revenue side

of the coin?

The overall return on investment will be based on the

traffic or interactions that an individual service gets; an

increase in interactions is usually synonymous with an

increase in revenues, either directly or indirectly.

The traditional way of generating interactive TV traffic is

to associate a service with ‘push’ TV, either using a red

button link directly or via a channel menu controlled by

the broadcaster.

Wrapping interactive sponsorship around high audience

programming can be very valuable, but what is the

call to action? To formulate an answer we need to first

realise that red button interactivity is limited in a number

of ways, including:

• After a red button invitation is removed from the

screen, the viewer has no mechanism to get to the

service should they want to

• Red button interactivity, when linking to broadcast

content, does not work when watching time shifted

or recorded material

• Synchronising the red button accurately to a 30

second advertising spot requires close integration

between the system playing out the adverts and the

network operator’s EPG or triggering system

– On many networks this facility does not exist

– For many channels distributed via multiple TV

networks, this is not possible. Often the networks

have only rough programme data for the EPG, but

no advert level scheduling signals

tv keys – unlocking usage of interactive tv Sites

To address the limitations of current red button

technology and harness the true potential of interactive

TV, Miniweb has derived a non-technological solution so

a call to action can be transmitted as part of the video

stream. This easily remembered ‘TV Key’ is inserted

with a character generator, and can work across all

platforms. It is always perfectly synchronised and can be

recorded with the media content on a PVR so users can

access the service whenever they choose to watch.

On the web, the two ways to get to content are URLs

and search. URLs do not work in a TV context, but a

numeric substitute does. This is achieved by giving

each TV Site a unique or geo-shared number, in a similar

way to EPG channel numbers, or text page numbers in

analogue Teletext.

Viewers simply need an easy way to remember the

number, a problem easily solved by associating each

number with a letter on the numeric remote control

keys. This is a proven system in the USA for example,

where the phone number 1-800-8896757 can be

remembered as 1-800-TV WORKS.

Premium rate text services often have a call to action of

‘Text TV WORKS to 67845’ – which requires two items

of information to be remembered by the viewers, and

takes them away from the TV environment.

Using a TV Key, the channel simply needs to display

the TV Key and provide a way for the viewer to enter

8896757 into the TV.

TV Keys work across different TV distribution networks,

on recorded content, after the advert or programme is

finished, and even in off-line marketing communications.

They can also be embedded in on-demand and

broadband video.

Miniweb’s ability to provide this cost-effective solution

for connecting TV audiences with interactive services

removes the limitations associated with the red button

for all platforms, in a non-technological way. Being able

to drive traffic from programming is the last component

in making interactive TV affordable and profitable.

Affordable interactive TV – NOW!

While some of the capabilities discussed in this paper

require broadband-enabled TV devices in order to be fully

realised, Miniweb is already applying these principles

across the Sky platform in the UK, making interactive

TV on Sky more affordable than ever before.

Right now:

• Content owners can quickly and easily develop TV Sites

using wTVML and register, test and deploy them for

free to over 8.8 million Sky homes using their internet

infrastructures and content

• Channels wanting to make use of an interactive

capability can tell their viewers to press ‘interactive,

not red’, and enter a TV Key specific for that channel or

programme. The immediate result of entering a TV Key

owned by a broadcaster is that the viewer is returned

to the channel and connected by Freefone to the TV

Site. This ‘Key and See’ capability essentially makes

it possible for channels to become interactive at a

fraction of the costs of operating their own broadcast

interactive infrastructure

• Content owners can use TV Keys in TV advertising and

programming, promoting specific interactive services to

their audience without taking them away from the

TV environment

What is the future of interactive TV?

With a step change in the economics surrounding

interactive TV, which includes the provision of a video

rich consumer experience, we will see an explosion of

interactive content services.

As this interactive content is created, it will increasingly

be associated with all types of video and TV

entertainment, providing additional revenue streams to

support a re-invigorated interactive industry.

It has always been clear that the more entertaining an

interactive application or service is, the better viewers

8

“TV Keys work across different TV distribution networks, on recorded content, after the advert or programme is finished, and even in off-line

marketing communications”

9

react to it, and broadcast interactive advertising

locations often include extended video clips related to

the product or service being advertised. The consumer

can then use the interactive application to select and

view relevant video segments. The costs of provision

have been very high, due to the nature of the service

occupying significant broadcast bandwidth. Yet, for the

largest brands and channels, such models have been

able to deliver value and have proved to be very popular

with consumers.

The combination of TV Sites and broadband video

delivers the equivalent of a video rich dedicated

advertiser location (DAL) at a fraction of the price of

broadcast delivered interactivity. Broadband-enabled

TV devices may not always be able to display broadcast

quality video over the public internet, but pulling small

clips as part of an interactive TV Site is simple to

achieve. This essentially enables any web streaming

infrastructure and site to host a DAL for a brand owner

24/7, and make it available as part of an interactive TV

advertising campaign.

Catch-up TV services delivered over the public internet

to PCs are a stepping stone to true broadband TV. In a

recent survey by the Diffusion Group in the USA which

asked, “Where do you want to watch your catch-up TV

services?”, 85% of respondents said, “The living room”.

For broadcasters it makes sense to deploy catch-up TV

services as an interactive extension to their linear TV

channels, directly to broadband-enabled TVs.

The Miniweb platform makes it possible to simply plug

in any internet hosted video archive as searchable

entertainment content available directly on CE devices.

Search and explore will become more important, as

will localisation and personalisation. The TV viewing

experience can be extended to support a wider viewing

community made up of friends in different locations,

who may recommend and share things that audiences

would not otherwise watch.

TV is changing in nature - there will soon be no

reason why all content should not have some form of

interactivity available. Broadband-enabled websites

could also become indistinguishable from traditional

interactive TV channels, with TV Keys becoming

equivalent to interactive channel numbers.

Conclusion

So, the economics of interactive TV fundamentally differ

between broadband and broadcast. With broadband:

• Many more devices can be reached with the

same development effort, due to the benefits of

interoperability based on standards

• The authoring costs of interactive TV are as low as

web technologies allow

• There are negligible costs in the testing, deployment

and ‘transmission’ of the service

• The fundamental entertainment experience of

viewers is enhanced

These factors will allow the benefits of interactive TV,

previously only within the reach of large broadcasters

and brand owners, to be achievable for all content

owners, whatever their business models.

Right now, the interactive TV business is entering

a completely new era that will be characterised by

massively reduced costs for broadcasters,

programme makers and advertisers who seek deeper,

more meaningful and more lucrative relationships with

TV viewers.

With interoperable content and broadband service

delivery, we will see an explosion of content designed

and optimised for the 10-foot user experience of the

television screen. Advertisers and broadcasters can

use broadcast programming, traditional 30 second

advertising spots or sponsorships to drive audiences to

interact with media rich TV Sites via the home network

and the internet.

As this occurs, a new TV experience will emerge, where

broadband video augments and enhances traditional TV,

10

driven by an inherently interactive consumer electronic

device, and where any form of web-style transactional or

personalised service can be made available.

TV Keys will become the de facto call to action,

embedded into a broadcast television stream, and will

replace call to actions that disconnect the viewer from

the TV screen. This is a pragmatic and cost-effective

alternative to the red button type iTV for all content

owners, providing a programme-related call to action,

but without the need for the sophisticated iTV/

broadcast stream.

By enabling a mass market of interactive TV content

through economically authored and cheaply deployed

services with higher traffic volumes, Miniweb expects

to increase the effectiveness of interactive TV for all

content owners. With the key metrics of cost-per-device

and return on investment having changed beyond

recognition, iTV is set to become a completely different

business proposition.

Some things do remain the same, of course. Interactive

TV will still work best when it is wrapped around

relevant content, so on-air programming and advertising

will continue to deliver the calls to action that drive

consumers to interactive applications.

The large volumes of eyeballs and usage will still be

derived from ‘real’ broadcast TV. Social, family-oriented

entertainment will still be the role of the TV set in the

corner of the living room. But the logical and inevitable

use of broadband connections and the availability

- at last - of an efficient and truly interoperable TV

applications programming environment, means that just

about everything else has changed.

Consumers will benefit from a converged broadcast

and broadband entertainment experience. In this

environment, interactivity is within reach of even

the smallest companies; it can be localised down to

the postcode level, applications can re-use internet

applications and can be written once and deployed on

many platforms.

The use of standards, and the adoption of the Miniweb

platform, enables all this and more. For the broadcaster,

network or device owner and brands/advertisers, the

only barrier now is having the creativity to use this new

medium to best support their business.

“TV Keys will become the de facto call to action, embedded into a broadcast television stream, and

will replace call to actions that disconnect the viewer from the TV screen”

Find out how Miniweb is defining the interactive TV experience at www.miniweb.tv or call us on +44 (0)20 8232 2020

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