The interactive TV revolution is well underway. This was the main message coming out of the recent MILIA 2003 show in Cannes, France. With seemingly more and more channels being launched on digital platforms, the conditions are tough for those channel providers looking to make an impact. Yet, channels based around interactivity in the United Kingdom, where BSkyB has over six million subscribers, are already seeing success.

AVAGO, an interactive live game channel, is one of the success stories of interactive TV via satellite. It already has over 77,000 registered players and over 650 winners a day. The channel, which isn’t available on cable yet, is generating close to GBP15 million ($23.7 million) per annum. Interestingly, the players on the channel are equally split between male and female.

Neil MacDonald, president of the Digital Interactive Television Group (the owners of the AVAGO channel), commented on the channel’s success: “The formula is if you have good interesting TV with compelling games formats with slick interactivity, you are on to a winner. We have seen the channel grow at a rate of 15 per cent per month. Word of mouth has been very important for the success of AVAGO.”

Others on the BSkyB platform in the United Kingdom are also achieving success. Attheraces, a horse racing channel owned by Tentendigital, is another interactive success story on satellite. With viewers able to bet on the races they are seeing, the channel is already seeing healthy viewing figures and betting revenues. Dennis Verrios, CEO of Tentendigital, said that while the company has a Web presence, “interactive TV is the central focus.”

Both MacDonald and Verrios believe that it is vital for them to be on BSkyB first, if for no other reason than the sheer reach of the platform. With cable subscriptions lagging in the United Kingdom, interactive channel providers need to be successful on BSkyB first. But AVAGO is still looking to launch soon on cable, MacDonald admitted.

BSkyB is also playing a key role in the interactive revolution. Its game channel Gamestar is seeing considerable success. It has 900,000 subscribers playing games each week. According to Adrian Pilkington, head of games at BSkyB’s Sky Active, more people watch Gamestar than channels such as MTV and Fox Kids Europe. Pilkington also extolled the virtues of digital satellite. “I believe cable technology with Liberate is slightly limited, and digital satellite could emerge as the only viable platform for TV games.”

France

While the United Kingdom is undoubtedly, the most advanced interactive TV market, due in no small part to BSkyB’s amazingly high subscriber numbers, other markets may have to wait a little longer for interactive applications and channels to make a big impact.

The French market is clearly not as advanced as the British. There are around four million digital TV (cable and satellite) subscribers in France out of 27 million homes. Until penetration rates increase, investing in interactivity may not be the best option.

Laurent Souloumiac, managing director of France Télévision Interactive, commented: “We don’t think it is a good time to spend a lot of money on interactivity. One or two years ago, we thought interactivity would be a bigger market, but for some reason it didn’t happen.”

He continued: “The installed user base is still too small. We have two platforms in France in that we have to develop two applications for TPS and Canal Satelite. It is complicated to develop applications for the different platforms.”

The impending mergers in Spain of Via Digital and Canal Satelite Digital) and in Italy of Telepiu and Stream could also make it easier for channel providers to build interactive applications, and even channels on those platforms.

Viewer Loyalty

One of the other main messages of the MELIA show was that betting and gaming will continue to drive interactive revenues. It is no coincidence that most of the success stories in the interactive space have been around these two genres.

While specific games and betting channels are likely to have success, other channels will look to use interactivity as a way of increasing viewer loyalty. Tanya Field, vice president of new media at Discovery Networks International, commented: “The programming process will evolve over time but the traditional format will remain predominant over the next five to 10 years. About 20 per cent of what we do in terms of interactivity is directly related to the programming itself. We want to add value and increase loyalty, rather than just revenue. I don’t believe we would look to sacrifice programming for the sake of new media.”

For kids channel providers, the same sorts of rules apply. Walt Disney Television International is starting to produce programmes like Star Ticket, an interactive programme where kids audition to be in pop groups. Other kids are able to be vote for their favourites, as well as participate in other areas of the show. The Disney channel is subscription-based, rather than advertising-based, so interactivity is important in terms of viewer loyalty. Around 10 per cent of Star Ticket’s budget is taken up by interactive features.

Mobile Phones

Perhaps the most compelling information that came out of MILIA was the success of interactive channels that tie in mobile phones. ABS-CBN Interactive in the Philippines introduced a game show R U Game, where viewers, as well as contestants, compete for prizes. Viewers send their answers via short messaging service (SMS). The success of the show has been staggering. It has an average TV household penetration of 34 per cent, and a one-day high of over 50 per cent, meaning over half of TV households in the country watched that episode.

Carlo Katigbak, president of ABS-CBN Interactive, explained the reasons for linking interactive TV and mobile phone use. “In the Philippines, cable TV only has only 15 per cent penetration. However, there are 14 million mobile users out of a total population of 75 million. SMS was clearly the best form and enabled us to reach low-income households.” — Mark Holmes