React In Peace

by Frank Maggio, Nov 29, 2007, 5:30 PM

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One of the most painful events an entrepreneur can ever experience is the death of a dream. Friday, at 5:00 PM EST, I'll bid farewell to one of mine.

ReacTV^® is pulling the plug.

It's not easy giving back a cable channel -- especially in your hometown. And when you've spent almost two years working with an incredibly generous, professional, and embracing company like BrightHouse, signing off means saying goodbye to friends as well.

Looking back, the idea (and the U.S. patent) behind ReacTV is not dead. The premise of rewarding viewers for watching and paying attention to commercials, and charging advertisers based only on verified attention, will live on. In fact, I'm certain of it.

But I would be lying if I said that ReacTV was merely a proof of concept. It wasn't. It was the flag on the moon; the stake in the ground; the opening pitch.

The decision to pursue my own cable network was "inspired" by a meeting with the president of one of the Big 4 broadcast networks (who will remain nameless). We presented the idea of incorporating CRaV^® advertising into the standard programming hour. The premise -- place a small logo in the upper lefthand corner of four to six ads each hour, and train your viewers that paying attention to these specially marked ads, and answering a question about one of them at the end of the program, could lead to a prize: a car, cash, trips, etc. The CRaV ad question and Web site address could be incorporated into the closing credits, bumps, etc.

My team came armed with research from Ogilvy-award-winning Ameritest, which conducted a 10-city test showing that this form of ad worked up to 300% better than normal ads. We urged the network to consider doing SOMETHING different to their commercials that would differentiate their ads from those anywhere else on the TV dial. Ultimately, we claimed (and now know) that viewers will not only stay glued to CRaV commercials, but will even surf to FIND "reactive" commercials, while the network they were watching goes into a commercial break.

I looked the network president in the eye and told him that, if deployed to an educated audience, CRaV ads might one day provide higher ratings for his network during commercials, than during his programming. And to boot, it was patented, assuring one network could exclusively license a proprietary way to differentiate the nearly 25% of its airtime that is currently identical to every other network.

Before he got up and walked out on us, he stared back at me, and told me (and I am quoting here, to the best of my recollection): "This network will NEVER be about promoting our advertising."

That was the tipping point. We left the room, and incorrectly assumed we only had three choices: a) Give up (not in my DNA); b) Try another network (too time-consuming and likely fruitless); or c) Do it myself.

Well, history shows that I chose to go it alone. In hindsight, even I was too much a product of the TV generation brainwashing, clinging to the idea that "if it isn't on the TV set, it's just not TV." I completely neglected to consider an Internet-only, broadband TV approach to ReacTV.

It's not that I didn't have other signs. In a high level meeting at Magna Global, one rising exec asked why we were even bothering with traditional TV. I thought at the time that this young buck didn't understand the power of TV. As it turns out, it was just that I didn't want to admit the superiority of the Internet. Walking away from traditional TV is like walking away from tradition itself.

Ultimately, ReacTV ran into two mountains too high to climb. First, the premise of charging advertisers based on accurately measured, second-by-second demographic ratings became an impossibility. When Nielsen refused to sell ReacTV ratings at any price last year, and then pre-announced DigitalPlus, foiling erinMedia's efforts to garner support and funding early this year, that portion of the ReacTV vision became an illusion.

Without ratings, ReacTV's cable premise morphed into merely using a cable channel to drive viewers to a Web site. Without the deployment of a real-time, synchronized remote control, there was no compelling reason to watch ReacTV on traditional TV. The Internet provided the same viewing experience (albeit on a smaller screen), and offered the additional ability to react and win online.

It became obvious, too, that expanding nationally had its technological hurdles, especially if viewers would be rewarded based on timed "reactions" to game show questions and commercial queries. With real prizes being rewarded, ReacTV had the extra responsibility of providing a fair and unbreakable technology that could offset delays and synchronization issues between MSO's, and ultimately, satellite TV networks. An eight- second variance between markets, and the addition of DVR-buffered set top box delays, provided proof positive that a single network-- the Internet -- would remain the only feasible and cost-effective means of ensuring a stable and fair competitive field.

So, what have I learned, and what can I share with you? Well, I would say that despite failures, and the potential loss of millions of dollars, if you believe in something enough, you just can't quit. The end is never the end. The right idea will find the right time to make things right.

But more importantly, I learned, and continue to learn, so much about the nuance of power in media. I continue to be forced, kicking and screaming, to acknowledge the liberating and democratic nature of the Internet, and its lack of barriers to entry. I continue to be drawn to its vastly superior metrics, and the unlimited potential it offers for expansion, innovation, and ultimately, domination of old media.

So with that, cue up the "Star Spangled Banner." Splash the color bars. Sound the tone. Fade to black.

And reboot.

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