Lessons learned from ITV trials
Even as one company announces it's calling a halt to its interactive video trial, another pops up to replace it. Running counter to reports in the media of the "failure" of interactive television trials, faith that interactive services will someday take off is still running high among service providers—albeit, the paths to those services are many, and the process will be much more evolutionary than was perhaps originally conceived.
As US West called a halt to its video dialtone trial in Omaha; as Viacom walked away from its advanced services trial in Castro Valley, Calif; these announcements, and many more like them, did not signal a failure of the technologies involved, nor of the vision of interactive services some day, but instead, they were proof of how the technology and the marketing questions are inextricably bound. Operators are busily analyzing all the data culled from their trials to plan their next step, and are doing what the cable industry has always been best at: hedging its bets.
"Full-blown interactivity, the visions of the computer industry of the massive client/server, interactive, all-digital, all-today [structure], has not come to fruition," notes David Robinson, vice president and general manager, digital network systems, GI Communications Division, General Instrument Corp. "It will be an evolution, it will take time."
Executives with Scientific-Atlanta lay out that evolutionary path as being analog, to advanced analog, to broadcast digital, and finally, to full digital interactivity.
"Starting in the middle of next year, the cable industry will begin deploying digital to the higher-end subscribers, and it will be mostly broadcast," predicts Scientific-Atlanta's director of digital systems, Bob Van Orden. "But the wrinkle that has become clear to us in the last six months to a year is, if you're going to deploy something that is digitally broadcast-focused, it also needs to be provisioned for later interactive services."
There is evidence to support Van Orden's theory. Time Warner, for example, launched arguably the most ambitious interactive services project in existence, the ATM-to-the-home, Full Service Network. Noting that while the Orlando project has been "terrifically successful" at allowing the MSO to get a handle on those technical and marketing questions, Jim Ludington, vice president of technology for Time Warner Cable's FSN, explains that FSN findings "will drive our development of software and network architecture going forward, and that's what Pegasus is, that's the first round." Specifically, the company has issued an RFP for a new analog/digital set-top, known as "Pegasus." Because it is "fully software upgradable," the set-top box provides a migration path from a digital, broadcast box, to a real-time, two-way, interactive set-top.Technology overkill answers marketing questions
Though Viacom Cable learned a great deal from its market trials of advanced services, concluded last February in Castro Valley, Calif., the operator put the interactive TV phase of the trial on hold. Viacom's Doug Semon, director of new technology, believes that occurred for two major reasons: one, the cost of the set-tops would have been "outrageous," and two, content was generally unavailable, and difficult to develop. For example, "How would you create interactive `Wheel of Fortune'?," he asks. "You have to guess the letters—are you going to type letters with the remote? . . . Use a mouse? Paint a picture of a keyboard on the screen and use the cursor controls to get to the right letter? It's all very complicated and largely unknown," theorizes Semon.
To be accurate on the first count, the prototypical set-tops that were mocked up, but never used in Castro Valley, were not meant to be utilized in commercial deployment mode; they were engineered for "overkill," according to Semon, in order to answer very specific technology/marketing questions.
"We thought it would be necessary to watch one channel while you recorded another, even if both were digital, so the boxes [for] Castro Valley were actually dual digital: they were capable of decoding three, simultaneous MPEG streams, and tuning two analog channels," he elaborates. With that approach, trial participants would, theoretically, never be blocked from doing anything they wanted to with the system, and the data gathered would be that much more valuable.
Part of the Castro Valley advanced services test involved a convenience vs. variety pay-per-view trial, for which Semon built a massive, standalone PPV origination facility, where Viacom originated 16 channels of conventional, analog PPV. The facility was necessary because, at the time, there wasn't enough programming available via satellite to support the trial. Again, the set-up was never meant for mass deployment.
Within a 16 to 20 channel PPV package, operators have to offer at least seven or eight different titles at the same time, according to Viacom's findings. After that, ops can use the additional channels to deliver additional start-times for the top titles, the company concluded.
US West, which recently ceased its video dialtone trial in Omaha, Neb., is headed back to the lab with the information it gathered there, in a move that is very much a part of its "evolutionary progress," says Nancy Sullivan, executive director for broadband and multimedia services for US West. Sullivan cites the earlier VCTV (Viewer Controlled Cable Television) tests conducted in Littleton, Colo. in conjunction with AT&T and Tele-Communications Inc. That test, which featured employees shoving tapes into VCRs in response to viewer requests, was followed by more research back in the lab, and began to lay the groundwork for the Omaha trial.
"You go out with the consumer, you learn some things, you go back, you take what you learn, you recreate, you redefine," Sullivan explains. "And then, you go out again with the next generation."
Sullivan, who has been quoted in the media as saying the technology in Omaha "wasn't quite ready for prime time," notes that because many of the technological components of the trial are still in the prototype stage, "the pricing is still quite a bit higher than what we would like to see in a deployment mode." According to sources close to the trial, US West paid about $2,300 per set-top (see CED, April 1996, page 4).
The operator also found that the dual, coaxial cable architecture it utilized in Omaha was extremely reliable; however, that reliability also carried a hefty price-tag, making it too expensive for commercial deployment. And that finding led the company to pull its video dialtone applications for the next 10 cities, mainly in a reevaluation of that architecture, says Sullivan. Another hurdle to overcome was the complexity of the end-to-end system integration. US West, serving as its own integrator for the project, found that working with prototypical equipment further complicated the task.
Going forward, US West is evaluating a number of technologies, both wireline and wireless, in the lab, including LMDS (Local Multipoint Distribution Service) and ADSL (Asymmetrical Digital Subscriber Line) for video services.Personal interaction and data entertainment
There is another path on the road to interactivity which is being explored by operators even as they prepare for full, digital interactivity. Advanced analog set-top boxes-such as General Instrument's CFT 2200 and Scientific-Atlanta's 8600X-offer what S-A executives have dubbed "personal interaction"; in other words, an interactive viewing guide gives consumers more control over their television viewing, while virtual channels provide more information specifically tailored to their interests. "Whether interactivity is on a real-time basis throughout the network or not is, for consumers, mainly an irrelevant issue," notes Steve Necessary, vice president and general manager of analog subscriber systems, Scientific-Atlanta. The advanced analog boxes will deliver text and graphics, inserted into the vertical blanking interval (VBI). "As a rule-of-thumb, we can offer 100 virtual channels in a 750 MHz system," he adds. To date, S-A has shipped more than 800,000 of the 8600X set-tops, beginning in late 1994, and has close to 50 customer sites. The company's largest customers for the boxes include Continental, Time Warner and Cablevision Systems.
To facilitate those virtual channel applications, General Instrument has licensed an interactive software module from Wink Communications, the "Wink Engine," which uses less than 128 kbytes of ROM. The company also produces an authoring tool called "Wink Studio," for the creation of content.
"A lot of the things that some people a few years ago thought could only be done with a digital platform, are now being done with advanced analog," comments GI's Robinson. "And the price point is obviously lower than a hybrid digital/analog box. So it's a very popular way to get the ball rolling."
Wink's senior marketing manager, Barak Kassar, says that although a server is not needed to provide the most basic level of interactivity with the company's system, operators who choose to deploy a server at the local level will reap the benefits of providing, among other applications, viewer-controllable interactive community channels, local news and local interactive commercials.
When it comes to interactive services, would-be providers and manufacturers alike are asking that age-old question: What will people pay for? Well, electronic program guides, for one. Viacom had success in Castro Valley at converting its trial customers to paying a monthly charge for the StarSight program guide, which, in that implementation, was built into the set-top box. StarSight Telecast Inc. has since that time announced a Digital Interactive Navigation System which is slated to be available after digital set-tops become available.
Dallas-based Westcott Communications Inc. has been successful at selling interactivity to the business community, having signed contracts with companies valued at more than $8.5 million in services on its Interactive Distance Training Network (IDTN) for this year. The network's clients include high-tech firms such as Oracle Corporation, Silicon Graphics, EDS and Intel Corporation. IDTN broadcasts are sent from Westcott's studios in Dallas, via satellite, to participants in "learning suites" based in a number of major cities. The interaction occurs when respondents in those suites use their One Touch system keypads (manufactured by a California company of the same name) to ask questions, answer questions, take tests, etc. That data is transmitted over an X.25 line back to the broadcast suite, and there are also three standard phone lines in each remote classroom so that each participant can call the "teacher" using the keypad. Part of the appeal of the service, say Westcott officials, is that companies can save the time and money they would have spent on schlepping employees around the country for "roadshows."
And while many operators have cooled on interactive video in the short-term, interactive data is the new hot ticket, as the success of on-line services has proved that people will pay for data, too. Along those lines, S-A is having some discussions with WorldGate Communications Inc., "a company that has a concept of allowing Internet access through the existing cable system, and through advanced analog set-top boxes," says S-A's Necessary. "This is not meant to take the place of cable modems, either in terms of speed, or certainly not in the ability to download files. But as an entertainment vehicle, and as an e-mail vehicle, it's pretty nice."
The provision of data now, and interactive video someday, explains a lot of recent market maneuvering.
"I don't think that interactive television is something that we will have to worry about for the next couple of years," says Semon. "The industry needs to be thinking about modems and telephony, but ITV is out there a little ways."