ITV Interview - Stephen Smyth, VP, Media, Reuters

Stephen Smyth is VP of media at news agency, Reuters. He recently spoke  to [itvt]'s Tracy Swedlow about Reuters' various interactive video services (which include an interactive TV channel on the Microsoft Media Center that was nominated for an Emmy Award this year for "Outstanding Achievement for Non-Program-Specific Enhanced or Interactive Television"), about the importance of interactivity to the company's consumer services strategy, about the company's interactive TV design philosophy, about its interest in video search, about its future ITV plans, and more.

[itvt]: Could you tell us a little about your responsibilities at Reuters, Stephen?

Smyth: I look after our consumer mobile, video, and outdoor media businesses, and a new area called Labs.

[itvt]: What is Labs?

Smyth: It's quite similar to what Google does with their Labs site. It's basically an area that's open to consumers, where we launch innovative projects, in order to get consumer feedback, to test new technologies, and so forth. It hasn't been publicly announced, but we've soft-launched it. If you go to labs.reuters.com, you can see our first project, which is called Audio News. It taps into the podcast phenomenon, and it also uses speech-to-text technology to create audio files.

[itvt]: And, of course, you are also in charge of Reuters' broadband video efforts, including the Reuters interactive TV service on the Microsoft Media Center, correct?

Smyth: Yes. That falls into our consumer video business. Our consumer video business comprises our online video, interactive TV and mobile video activities globally.

[itvt]: How high a priority are interactive broadband video and interactive TV for Reuters?

Smyth: They are strategically very important to our consumer services strategy. We are pursuing a number of audiences: business professionals, individual investors, and a group we call "world citizens," who are strong consumers of international news and current affairs. In developed countries--the G8 countries, if you will--we are very focused on providing services on interactive platforms for our target consumer audiences. So we have Reuters.com, Reuters Mobile, and, of course, Reuters Interactive TV. Those are the three platforms that we're focused on for our consumer services strategy in developed countries. Our consumer services strategy is part of the company's publicly announced New Markets growth strategy, and interactive television is an important plank of that initiative.

[itvt]: Why is interactivity so important to Reuters' consumer services strategy?

Smyth: Interactivity unlocks the depth and breadth of our content. It gives the audience relevant and personal experiences.

[itvt]: You just mentioned you are working on delivering three main kinds of interactive experience--Reuters Mobile, Reuters.com, and Reuters Interactive TV, correct?

Smyth: Yes. We have 1-foot, 3-foot and 10-foot experiences. The 1-foot experience is mobile, the 3-foot experience is the PC, and the 10-foot experience is interactive TV. We also have a 100-foot experience, which is our outdoor business--for example, our sign in Times Square. Now, we're very much audience-focused--technology is ideally transparent to the user--and each of these experiences is very distinct from the others: they have distinct frontends. But what is happening on the backend is that there is a growing amount of convergence taking place--particularly around IP-based technologies--which allows you to share content and capabilities across these platforms. That is, if it makes sense for the frontend user experience.

[itvt]: Would it be fair to say that your consumer services business marks quite a shift for Reuters?

Smyth: Yes. Within our media business, we have two businesses. We have our traditional model--the news agency model. There, we syndicate content feeds to a variety of media properties. That's a business that we've been in for many years. Our consumer services model, on the other hand, is about directly offering media services to consumers and advertisers.

[itvt]: Has taking this new strategic direction of targeting consumers directly through interactive services paid off for Reuters yet?

  Smyth: It's still early days--or years--for this strategy, but I definitely think it is already starting to pay off. Take, for example, our online video service at tv.reuters.com. We launched that just before the Iraq war started--so around 2 1/2 years ago, which makes us an early mover in that space. We've been selling ads on it--video ads as well as banner ads--for about a year and a half, and that business has grown materially, particularly in the US.

So, basically, we've given ourselves some new options, and those options are showing good trends in terms of the audiences they're attracting and the ad sales they're generating. In the course of doing this over the past 2 1/2 years, starting with our online video service, we've also learned a tremendous amount about how to operate interactive video services--everything from streaming through to content management, to ad sales, to tracking, and so on.

[itvt]: Can you provide details on the size of the audiences these new services are attracting and on the amount of revenue they're generating?

Smyth: It's our policy not to disclose those figures.

[itvt]: What kinds of options are your new video services providing for advertisers?

Smyth: We primarily do 15-second spots, though, in some cases, we do 30-second spots. We've also done synchronized campaigns online, whereby the advertiser has in-stream spots but there's also a synchronized banner unit and other types of units on the page. Basically, as the advertising video is playing out, the experience on the page changes in a synchronized fashion. So it's more of a holistic solution, if you will. Then, when the content comes up, the synchronized units go away and the service goes back into content mode. We did that with AmeriTrade, for example. We also do multiplatform campaigns: we did one such campaign for Diet Coke, which was on our 1-foot, 3-foot and 100-foot platforms.

[itvt]: Are your 100-foot platforms--your outdoor video displays— interactive?

Smyth: Yes. The Reuters Sign in Times Square is entirely interactive and, at 22-stories high, is the world's largest digital display system. For example, we've made it possible for people passing this display to use their cell phones to compete against one another in a Yahoo! Autos-sponsored car race game that appeared on the display. We also recently did a Nike campaign, where people could design their own Nike shoe on The Reuters Sign using the buttons on their mobile phones, and then go to the Nike site to purchase their customized shoe.

[itvt]: You recently launched a new version of your interactive TV channel on the Windows Media Center platform, correct?

Smyth: Yes. We launched it in July. One of the main differences between the new version and the old version was the introduction of advertising solutions. GE was the first advertiser on our interactive television channel and we provided them with two types of advertising   solution. One was a cross-platform buy. GE was running an online video advertising campaign with us on our 3-foot platform, and we were able to add inventory from our 10-foot service. This was because we were using the same IP backend to run both platforms. So we would stream video to both, and thus aggregate a larger audience for their advertising messages. To use a fancy phrase, you could call that a "scalable commoditized cross-platform solution." The other solution we provided GE was a standalone platform solution: we created a special GE interactive TV page by skinning our page templates with GE brand elements and presenting the GE creative.

[itvt]: One thing that seems to differentiate your interactive TV service from other broadband video news services is the raw footage you provide.

Smyth: Yes. That's definitely one of our differentiators--vis-à-vis repurposed linear programming, which is what most of our competitors do. It's something that very much fits with our brand values of timeliness, accuracy and independence. It gives the ability to users to "be there," and to make up their own minds about news stories from around the world. It enables more trust between us, the news provider, and the end-user. We're very much trying to innovate. Not only in terms of the technology, the delivery and the business model, but also in terms of the programming itself.

[itvt]: What was the process that led to the multiscreen mosaic-style design of your interactive TV service?

Smyth: We had a number of inputs. One input was our experience with our online service. Thumbnail mosaics work well online, so we decided to maintain that presentation approach. We also spent a lot of time with our partner, Microsoft, and actually used their usability labs, up in Redmond, Washington, to test various user-experience options with our target audience. We also did some testing on our own. And, in addition, we spent a lot of time with a diverse group within Reuters, brainstorming on the various ways that people might use the service.

One of the design decisions that we made very early on, based on everything we were seeing, was not to have any features in our interactive television service which would require use of a keyboard or mouse. Based on testing out a number of other services that require keyboards and mice--both Media Center services and services on other platforms--we decided that keyboards and mice would not make for an optimal end-user experience. So we limited interaction with the service solely to the standard Media Center remote: the four arrow buttons, the "enter" button, the "back" button, and the green "menu" button. An important consideration in this I/O choice was also our desire to create a reference design that could easily be adapted to traditional cable and satellite TV platforms.

[itvt]: You designed the interactive TV service's interface in-house, correct?

Smyth: Yes, we designed it in-house, but, as I mentioned, we worked closely with the Media Center team to optimize it.

[itvt]: Did your designer have experience in interactive TV design?

Smyth: They did have some experience in interactive TV, yes. The ultimate design of the service was very much a team effort. Another important influence on the design was a branding tool that we have, called "Infopoint." It's a lobby display system that Reuters has developed. It's deployed mostly in Europe. While it's not interactive television, it has some similarities.

[itvt]: What does it do?

Smyth: It's basically a sound-off, non-interactive multimedia display. It primarily does text, pictures and charts, across a number of news categories. The display rotates through the categories continuously.

[itvt]: What are the other differences between version 1 and version 2 of your interactive TV service, in addition to advertising support?

Smyth: We introduced some significant new features. One is "Play All," which automatically creates a chronological play list of all of the video on the service. So you can sit back and watch the whole playout in linear fashion. It averages eight hours on a given day. So you could not touch a button for eight hours, if you wanted.

Another new feature is "My News Desk," which is basically a personal channel. It allows you to, for example, watch a clip in "Top News," a clip in "Oddly Enough," and a clip in "Business," and then save them, so that you can show them to, say, your wife or husband when they get home. It allows you to create your own temporary archive.

We also introduced an interactive ticker. We had a ticker in Version 1, but it was non-interactive. What the interactive ticker does is that it allows you to use the left and right arrow buttons to flip through it. It scrolls by default, but you can use the left and right arrows to go forward or backwards faster. Then, if you see a story you like, you click "OK," and it then pops the story into what we call the story-page template.

[itvt]: Can you tell whether or not people are taking advantage of these new personalization tools?

Smyth: Yes, because this 10-foot experience--our Media Center interactive TV service--sits on top of the same IP-based platform that supports our 3-foot experience, we are able to repurpose the tracking capabilities we use for the 3-foot experience. We're able to track the same metrics--unique users, page views, streams and so on.

[itvt]: Do you know if these features are being used by regular users or mostly by tech-savvy users?

Smyth: Well, in everything we do, we try to steer a fine line between futuristic for futuristic's sake, and features that are a stretch, but not outside the reach of our average target user. We're actually very conscious of the distinction between our average target user and, say, a software engineer who wants to try out the latest features on the Media Center. We've seen a number of other services, which, in our view, were kind of futuristic for futuristic's sake. In contrast, we've tried to focus much more on the 80 percent user scenario of our target audience: sure, there will be 20 percent who will always figure out how to do X, Y or Z. But you can't build a viable product around those users. Which is one reason why we did not include, for instance, configuration settings in our service, even though the Media Center platform would have supported our providing a section where you could configure all manner of things--such as which channels are on the front page, what kinds of information go into the ticker, etc.

Another reason for not including complex features like this in our interactive TV service is that we believe that medium should be kept simple. Our reasoning here is similar to our reasoning in our decision not to require use of a keyboard or mouse in the service. Interactive TV--the 10-foot platform--is very different from the PC--the 3-foot platform: people typically have a much more passive approach to interacting with the 10-foot experience than with the 3-foot experience. While it may be appropriate to, as it were, lean forward and do all kinds of interaction, in terms of setting up things on your PC, we just don't think it's appropriate for the TV. If you're creating a television experience, simplicity of interaction is key to that experience. At this stage in the evolution of the interactive TV space, I'm firmly of the mind that for most people, ITV should be no more complex than navigating a DVD menu.

[itvt]: Are you interested in implementing some kind of video search functionality on your interactive TV service?

Smyth: That's an area that we are very interested in. We think it has tremendous potential--not just for us, but for the medium in general: there is a growing amount of niche video on the Web, and that could definitely be transformed into a TV-viewing experience through an IP-based platform like the Media Center--if it's done right. There's really no technical reason why it couldn't be. And one big advantage of search over directory-based navigation--which is what Media Center has today--is that it makes it easy for users to find content from smaller players, as well as from established media companies like Reuters that are more likely to be listed in a directory-based system. So there are definitely benefits to developing search for TV. But the problem is maintaining the simplicity of the user experience, because search typically requires you to enter text--at least as it's currently implemented. I think coming up with a way to allow interactive TV users to search for video, without requiring them to use a keyboard, is a worthwhile challenge: I think there's a real benefit there, if we can crack it as an industry, and I believe that some kind of open-standards approach to doing it would be very useful. The whole industry could grow significantly, if we could come up with a user-friendly way for the 10-foot platform to unlock the value of all these video assets that are currently lying dormant.

[itvt]: Are you interested in offering services on standalone consumer electronics platforms?

Smyth: Yes, we are. Currently, we are focused on platforms that support streaming, although we are also looking at platforms that support video downloading and pre-caching. Streaming platforms work well for our advertising model because they support tracking and inventory management reasonably well, compared to platforms that do downloads and local playout. Another reason we're focused on streaming platforms is the nature of our content: it's very important that news content be timely. Our news often needs to be consumed within hours--if not minutes--in order to get the most value out of it. We don't have the luxury of caching video the night before, whereas companies providing movies and other evergreen content do.

[itvt]: You also distribute video to mobile phones, correct?

Smyth: Yes we do. Actually, through our news agency business, we've been distributing video to the mobile platform for approximately three years now. So we have a lot of experience doing that. And, based on that experience, we've reduced the length of the video clips we offer, to make them more appropriate for the mobile platform. We've recently launched video as a feature in our consumer mobile services. We just announced video on our Vodaphone Live service in the UK. We're also offering video in our Japanese mobile product, which is distributed on the NTT Docomo network, and we are looking at a number of opportunities in the US to distribute video to the mobile platform.

It's important, however, to be aware of the very limited technical reach of video on the mobile platform. We've done a lot of research to understand that, trying to figure out what is reality versus hype. We are, I think, investing sensibly--i.e. in a way that's consistent with the reality of the technical reach of video on mobile.

[itvt]: Which companies do you partner with in order to deliver content to your interactive TV and your PC services?

Smyth: We deal primarily with one partner to do both. A company by the name of The Feed Room. They helped us launch our service 2 1/2 years ago, in March 2003. They receive our content, organize it, present it and deliver streams to end-users.

[itvt]: I'm not sure if they were the first, but they were certainly one of the first companies to really embrace online video streaming in the news category.

Smyth: I think it's fair to say that they remain a prominent player in that area. We recognized their leadership in the space, and that's why we decided to work with them.

[itvt]: Is Reuters planning to develop an interactive TV channel for distribution on cable and satellite?

Smyth: Interactive TV is a strategically important platform for us, and we are looking at a variety of opportunities in the US and elsewhere. Where it makes sense, in terms of the risks and the rewards, we will deploy interactive TV services. Obviously, though, each of the different platforms--cable, satellite, IPTV or whatever--is going to have different constraints. In particular, we are very excited by the potential of IP-based interactive TV platforms, both in terms of the costs of development and operation of services and the benefits of scalability and flexibility.

[itvt]: Are you looking at adding more viewer participation to your video news services: for example, allowing viewers to submit text comments or even their own video clips, or creating communities of interest around various news topics or types of news?

Smyth: Yes, we are very much looking at that--not only with respect to interactive television, but, in fact, with respect to all of our consumer services. We are examining this through our Labs initiative. I can't provide too many specifics yet, but, basically, we are looking at the whole area of user-contributed content. So not only video, but also still images and text.

From a user-experience point of view, this is all about increasing the level of engagement with the user. Until now, when it comes to interactive platforms, we've focused on allowing end-users to navigate content in different ways and personalize their experience. But we're also very aware that interactive platforms allow for two-way communications. This is something that we think is still a great opportunity, and that has not yet been really exploited. So yes, we're working on various mechanisms and user-experiences that will enable users to engage in more of a two-way communication with Reuters through various media: text, still images, and, of course, video. This is something that's very important to us--though I think the entire news industry also realizes that it's an important opportunity. So definitely bookmark labs.reuters.com, because that's where we're going to be testing this stuff.

URL: www.reuters.com

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