ITV Opinion: Red-Button Interactivity: Waving or Drowning?

By Scott Gronmark

Red-button interactivity in the UK has suffered some bad knocks in 2006. Zip TV, for so long the only potential rival to Sky's virtual monopoly of interactive TV advertising, went under at the start of the year. Soon afterwards, Andy Duncan, Channel 4's chief executive, dubbed interactive TV "the emperor's new clothes" and announced that his company would have no more to do with it, so there! To add insult to injury, he described it as "clunky" and "inefficient." Ouch!

Recent research also suggested that click-through rates for enhanced TV--the percentage of available viewers pressing red to access program-related content--are declining.

And now satellite TV giant Sky, the great champion of interactive TV (along with the BBC), has apparently decided that the Sky Active portal, available via the red button behind Sky channels, should mainly be a medium for customer communications, rather than the lively, fun-packed entertainment service it has always wanted to be.

So, should those of us who have been associated with the red button get busy re-inventing our personal histories to big-up the video-on-demand, IPTV, broadband PC and mobile TV aspects of our portfolios? And should players in markets trying to catch up with the UK immediately re-examine their strategies (i.e. panic and find something less problematic to gamble their money on)?

Call me a sentimental old fool, but despite the fact that practically all of my consultancy's work during the past year has centered on non-red button projects, I wouldn't write the platform off just yet.

Now, Andy Duncan is no dope; for a start, he was a key member of the ER team which saved the UK's flatlining digital terrestrial TV platform. But this time he may have rushed to judgment. Channel 4 has stated that it wants new media to yield £100 million of revenue, and interactive TV probably turned out to be a few decimal points west of that target. Then again, I'm not sure it's fair to blame the medium for one's own unrealistic expectations--or for the paucity of decent interactive programming on Channel 4 in recent years. Standalone games, an awful Test Match enhanced TV service, interactive "Big Brother" and a few odds and ends do not constitute a viable interactive TV strategy. Oh, and last month Channel 4 revealed that it will be supporting the latest series of "Big Brother" with an interactive TV service yet again this year. And, of course, the company is still keen on advertisers launching interactive campaigns on its channels.

So, it's business as usual, with the boring, pointless services removed. Sounds like common sense to me--after all, if you haven't got it, don't flaunt it.

Zip's demise earlier this year was more worrying, given that the company whole-heartedly supported the concept of interactive TV advertising, seemed to offer the market what it wanted (a credible alternative to Sky), and produced some decent creative work, and given that a number of its campaigns performed impressively in terms of how long viewers who pressed red spent with brands (over five minutes on average).

So, did Zip TV fail because interactive TV advertising doesn't actually cut the marketing mustard? That would be easy to surmise, but hard to prove. The people who ran Zip might argue that their inability to sign a carriage deal with the UK's main commercial broadcaster, the Independent Television Network (ITV), despite 18 months of negotiations, meant that not enough advertisers were willing to fill their order books. Undoubtedly, that didn't help.

Not long after Zip had given up the ghost, the very same ITV (along with the technology company emuse) announced that it was offering advertisers the chance to launch interactive campaigns simultaneously on Sky and Freeview and mobile phones. The first campaign, for T-Mobile, launched on Freeview over Easter. A resounding vote of confidence in the future if interactive TV advertising from the UK's main commercial broadcaster.

Finally, the recent news that Sky is making customer communications rather than entertainment the focus of its bandwidth-hungry Sky Active portal is genuinely interesting, but not necessarily apocalyptic. Ever since Sky introduced its women's magazine-style front page for Sky Active back in 2004, many have wondered what it was meant to achieve. There are 400 channels on Sky offering every kind of entertainment you could imagine (and some you'd prefer not to). What niche, what audience need, was another entertainment service--interactive or not--designed to serve? And please note that they're not actually removing the whole service; just re-emphasizing parts of it.

What's happening in the UK, which still boasts the most mature and lively interactive TV market in the world, is the inevitable and generally sensible response by broadcasters and platform owners to audience behavior rather than a prelude to Armageddon.

ITV (them again) report that they have interactive sponsors for all fifteen available programs this year. We've already heard about their new triple-platform interactive TV advertising offer (quadruple, if you count online). And they've started offering extra video behind the red button; notably for their most successful program, "Coronation Street."

Five (the broadcaster formerly known as Channel Five) this month announced plans to expand its interactive TV activities, and it's already pretty energetic. Discovery Networks Europe is making the red button available to advertisers on Sky, and offering interactive TV ads on Freeview. The BBC (bless!) is still cranking out an alarming quantity of top-quality enhanced TV programming, and is boosting its BBCi 24/7 offering with a big Movies service this summer.

This doesn't feel like the death throes of a moribund platform.

As a mature medium, interactive TV has had its share of failures, and that makes it unattractive to many new media neophiliacs: by way of contrast, IPTV is fantastically attractive because it hasn't been around long enough for us to be sure which bits of it are going to fail or how successful it's actually going to be. (In reality, there's plenty of evidence, but most new media people don't really like evidence--we prefer to travel hopefully.) Ditto mobile TV.

The truth is that all of these platforms will work--in their own way. If you want your audience to play along with a live quiz show or choose an alternative live match or event at a big sports competition, go for red-button interactive TV; in many ways it will eventually underline the value of live TV in a largely on-demand world. If you want viewers to vote or comment or get regular updates about a show, use mobile phones. If you want them to be able to watch a making-of video to do with a TV series, or to be able immediately to watch another episode or catch up with an extended video-based message from the sponsor--mass-market IPTV will be along in an eye-blink (or two).

Interactive TV is here to stay. We'd all like bandwidth to be cheaper and set-top boxes to have more processing power and for profits to be easier to come by. But given all its constraints and frustrations, we know two things: millions of viewers use it, and while click-through rates may be dropping, retention rates (i.e. the amount of time viewers spend with an interactive service) are actually rising. The viewers who "get" interactive TV evidently love it. In an increasingly fragmented market, holding onto viewers once you've got them will be utterly vital.

And the nice thing is that cable VOD and IPTV will simply be crying out for red-button interactivity to move viewers around inevitably complex content offerings; the real trick for broadcasters will be to keep viewers with your content and that of your sponsors for as long as possible.

New media folk have a tendency to try to pick definitive winners and losers, often based on how much hysteria a particular platform is creating at the latest conference. But the fact is that every platform has a role to play; the new Masters of the Universe will be the ones who figure out how to make every platform work for them and their clients.

I wouldn't delete the red button-related sections of your CV just yet.

Definitely waving.

Scott Gronmark, the former head of interactive TV at the BBC, is managing director of Scott Gronmark Associates (http://www.scottgronmark.co.uk). He will be chairing the Access Events Future TV conference in Copenhagen on June 19th and 20th.

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