• by Erik Sass  @eriksass1, April 5, 2006

A new interactive cable network, ReacTV, due to launch on July 16th, 2006, may alter the advertising landscape--and make waves in the nascent interactive market. According to its founder, media impresario Frank Maggio, this all-game show network will allow viewers to play along with the programs as well as trivia- and game show-themed advertising pods, all without the expensive set-top boxes that doomed interactive TV efforts in the late 1990s.

Maggio claims that ReacTV will be the first "TV-Internetwork," simulcasting live shows and live ad pods on both TV and the Internet, and allowing viewers to "react" to both media--in the former through cell phones or a special ReacTV remote, and in the latter through a normal point-and-click interface. Viewers will be able to win prizes for correct answers during live programs and ad pods, Maggio said, boasting that low production costs will allow ReacTV to return 30 percent of ad revenues as cash prizes. This programming approach has been proven to drive higher viewer engagement with advertisements.

Maggio cited a recent study by the Center for Media Design at Ball State University in Muncie, Indiana, on behalf of the Game Show Network (GSN), as affirmation of his findings during a decade of studies--and also noted that he patented this method in 2003: "It might be news to GSN and Ball State, but it's not news to me."

He was quick to strike a conciliatory note, however, dismissing worries that he might broaden his portfolio of litigation--already substantial with his lawsuit against Nielsen Media Research--with a lawsuit to protect this patent: "Litigation is not something that I want to bring to bear in the television world right now. I believe TV, particularly smaller networks like ReacTV and the Game Show Network, need to find a way to raise the profile of TV as an advertising medium and educate advertisers about these new possibilities."

Maggio went on: "I'm very much about finding a way for Game Show Network to work with ReacTV to find a win-win solution. One of the methods might be for ReacTV and GSN to simulcast the same adpods, because the more people watch, the bigger the prizes--and the bigger the prizes, the more people want to play."

As for the patent itself: "it's a very lengthy explanatory document that protects and claims reactive ad pods, not only from a technical perspective, but also as a business model as to how a promoter can collect additional revenues--in part because these ads work better, and that in turn allows the network to return a good part of the revenue to the viewers as prizes," according to Maggio.

Although the patent was granted in 2003, Maggio traced a long lineage for reactive TV dating back two decades: "When I left Procter & Gamble in the late 1980s, I started tinkering with the idea of game shows, and at the same time I knew then that ad-skipping was only going to get worse, and there had to be a way to keep people interested." After the granting of the patent, Maggio said: "we spent about 6 months tweaking the data, and we now have a pretty compelling research background that says this stuff works."

ReacTV is a more recent project, however, because Maggio first hoped to sell the technology by helping major broadcasters and cable networks make their programming more "reactive": "We spent two years trying to make inroads at the major broadcast networks, and we consistently heard the same story: 'we're not about promoting advertising, we're about promoting content.'" Maggio concluded wryly: "Now, I understand that's the old business model--but we all know who pays the bills."