• by July 9, 2004

OPENING UP INTERACTIVE TV -- One of the best signs that interactive TV isn't dead - just dormant - is the behind-the-scenes jousting that's been going on for control over interactive TV platforms. Most encouraging of all, one of those battles, a patent dispute between Walt Disney Co. and interactive TV developer OpenTV Corp., has been settled, paving the way for accelerated development of the market. The settlement is significant, because Disney has been a major supporter of interactive TV development, and can attribute some of its greatest corporate achievements to the sector, at a time when its once stellar businesses - like ABC's broadcast network and the Disney theme parks - have been sagging. In their place, Disney has been touting interactive TV breakthroughs like ESPN In Motion and its fledgling video on demand movie business. In fact, those were some of the very same innovations embattled Disney chief Michael Eisner has been citing to assuage criticism from disgruntled shareholders that Disney has not been doing enough to innovate in the area of technology development. Imagine that?

As part of its resolution of its interactive TV litigation with OpenTV, Disney gains the right to exploit patents and systems for synchronizing Internet content with TV programming, enabling TV viewers to simultaneously receive content via the Internet that relates to a TV show they're watching. Clearly, it is a hybrid step toward true convergence when TV and seamless interactive TV applications that are based either on interactive switching through a TV set-top device, or via TV distributed directly over broadband Internet. But the easing of a legal barrier should at least accelerate this baby step at a time when marketers and agencies are looking to step up to the enhanced TV plate and actually put some ad dollars down on the table - real money that will drive enhanced TV applications. They have to. If they wait much longer, TV service providers - especially cable and satellite TV operators - and the consumer may bypass Madison Avenue altogether. In fact, the reticence of cable operators is a major reason why enhanced TV advertising features - mainly ad-supported video-on-demand and addressable TV advertising - haven't moved much faster. The cable guys, it seems, are more focused on satisfying the customers (consumers) that account for 95 percent of their revenue stream (subscription fees). This, of course, is infuriating people in the ad business, especially advertisers, agencies, cable network sales executives and the Cabletelevision Advertising Bureau, which has been touting cable's addresability and micro-targeting capabilities since Bob Alter ran the bureau.

But one spunky network appears to have found a solution around the operator stranglehold on the set-top box. The Weather Channel has begun deploying a new device in cable TV head-ends that enables advertisers to customize messages based on the time, place or the relevance of weather to consumers. Weather Channel calls this approach "contextual copy-splitting" and it appears to be a genuine breakthrough for a national cable network. And we can just imagine how relevant and contextual ads for certain products might be if served while consumers are in certain weather related mindsets. The ads might seem really hot, or even pretty cool.

In an example cited by the Weathermen, a packaged goods marketer might opt to arrange its ads based on the time of day, or the specific time zone a viewer is seeing them at, promoting one product during daytime hours and one around dinnertime. In another scenario, a large retailer might utilize the geographic component of contextual copy-splitting to target key areas where its promotions are running. Or, how about an automaker promoting a truck of SUV with its ads targeted by DMA, time of and specific weather triggers like rainy conditions or snow piles that are bound to get all four wheels turning in consumers' heads.

Weather Channel calls its new gizmo the IntelliStar and has plans to deploy a total of 1,700 of them in cable systems by the end of the summer, bringing the contextual copy-splitting capability to 70 percent of the 87 million households reached by the channel. We can't wait to see Madison Avenue interact with that base.