T-commerce: Don't touch that dial!
And it's got proponents excited about the future. Indeed, executives from infrastructure companies are convinced that enhanced television has the potential to evolve into the platform for the next-generation of online viewers.
And with an estimated $50 billion per year currently spent on TV ads in the United States alone, Madison Avenue advertisers are also closely tracking the development of this nascent market.
But executives gathered in New York for the eTV World conference cautioned that this still fledgling market has yet to reach boost phase.
"Today, it's early," said Bruce Crowley, vice chairman and president of digital media company ACTV's HyperTV Networks division. "Less than five percent of TV programming is enhanced in some way."
Enhanced TV currently appeals to viewers who access a handful of fairly predictable applications, such as Web surfing, weather, networked games, episodic TV spots, pay-per-view movies and gambling.
The people who use enhanced television tend to be the early adopters who embrace new technologies. In the near term, enhanced TV will mean little more than consumers interacting simultaneously with their separate (but co-located) TVs and PCs.
HyperTV's research found that 52 percent of the people in the 12 to 24 age group who own a computer also keep televisions in the same room as their PCs.
What's more, the vast majority (69 percent) listens to music online while 25 percent watch TV as they surf the Web.
Pointing to those statistics, Crowley said advertisers risk committing a huge mistake if they attempt to communicate with this multimedia-savvy audience in the same old ways.
"People are multitasking and paying less attention to traditional (TV) ads," he said.
But it will take at least another three years before most consumers are accessing a single screen to view integrated interactive programming and advertising via broadband or advanced digital cable systems, Crowley added.
HyperTV is preparing now for such a future, Crowley said, especially through a 24-hour-a-day, 7-days-per-week partnership with MTV Networks and Fox. Over time, the company expects to evolve into a broadband-single-screen-oriented experience. It is also pioneering targeted, enhanced TV advertising geared toward specific viewers.
"People only want to interact for a few types of content right now," agreed Mike Rockwell, chief technology officer with Avid Technology Inc., a vendor of digital media creation tools and platforms. His short list included information/news, games, gambling and adult entertainment.
Arthur Orduna, vice president of marketing with Canal+ U.S. Technologies, offered a similar prediction about the state of the U.S. enhanced TV market.
Europe is ahead of the United States when it comes to interactive TV, claimed Orduna. He said that of Canal Satellite's 14 million European subscribers, 96 percent currently access interactive applications at least once daily. Canal+ is an interactive TV service provider that primarily operates in Europe, and Canal Satellite is one of its divisions.
It will take an evolution in access devices to really spur the U.S. market, Orduna said. Set-top boxes, as they exist today, are merely placeholders for next-generation enhanced/interactive devices, he predicted.
"We understand that the set-top box has to go away. All of the different elements inside the set-top box will migrate into other devices in the home or be hidden," Orduna claimed.
He said to expect these next-generation enhanced TV devices to be standards-based and to include as de facto components HTML-compliant browsers, hard disks and caching, sophisticated graphics and more memory to be able to run middleware like Sun Microsystems's Java Virtual Machine.