As viewers increasingly use technology to time-shift and skip commercials, broadcasters have begun thinking about how they can best use technology to maintain their relevancy to advertisers.
IPTV, with its interactivity, data collection capabilities and electronic merchandizing, is a strong contender for doing just that, but the tools are so new that few have experience to go it alone in implementing the solution.
A company like the Woodlands, TX, -based WhiteBlox — with 42 separate Internet TV tools, online chats, forums, polls, data collection and a suite of back office tools —can help content owners surmount the learning curve.
One such content owner, the Indy Racing League (IRL), contracted with WhiteBlox to enhance its offerings, providing race fans with coverage of time trials, pit crew reports and driver interviews in the month leading up to the Memorial Day Indianapolis 500 race. More than 100,000 fans from around the world logged on to watch, creating a new revenue center of IRL.
IPTV Update caught up with Wade Schalles, president of WhiteBlox, at the C4-Sports Show in Las Vegas last week to learn more about how the company can help broadcasters use the Internet to generate additional revenue.
IPTV Technology Update: Could you give me a few more details on your
involvement with the Indy Racing League, and more specifically the Indy 500 race?
Wade Schalles: The Indy Racing League was looking for more options
to get their product into the marketplace. They have cable TV, ABC doing the broadcast, and they do radio as well. They wanted to continually offer more.
Internet is not necessarily new to them, but they wanted to expand their offerings to the marketplace and do it in a way that became equally as exciting, if not more exciting, than cable TV. With Internet, you have the interactive capabilities that aren’t available with ordinary TV other than volume control, channel selection and the traditional on and off.
Internet television is a new industry for everybody, and the Indy Racing League was looking for an opportunity to find out how it could use this vehicle to enhance the product it already has.
IPTVU: The IRL's core competency is putting on a world-class race, not the Internet. What are the key pieces that content owners, like The Indy Racing League and broadcasters, need to be successful on the Web?
WS: Basically, they are asking, “How do you reach out to the viewer on the Web?” Right now, they know how to get there through cable TV. This Internet distribution avenue is a completely different marketplace. Currently, most IPTV — or what used to be referred to as Webcasting — is watched over a computer, although cell phones, PDAs and set-top boxes are the next mediums for consumers. But right now, most Internet content is viewed by way of the computer.
So consumers are basically looking to a new market where they can do e-mails, shop and reach out while watching their favorite sporting event.
We offer eight ways to monetize their existing content that they don't currently have available with TV, such as different types of advertising, e-commerce solutions, subscription models and video on demand.
Broadcasters spend a set amount of dollars to broadcast an event and then plan on receiving an offsetting amount of advertising dollars for their efforts using the traditional model. But with a WhiteBlox solution, it is far more economical to broadcast over the Internet, and it’s a great non-traditional income source. The job for traditional broadcasters is to pick up all the money that is on the table. They’ve paid for the rights to the broadcast; they have spent their own money to produce it. They should enjoy all of the revenue streams. Having access to a video-on-demand solution is a significant chunk of change, and the viewing experience is worldwide. The Web opens the door to a significantly sized marketplace.
IPTVU: Many local broadcasters would like to take advantage of the Internet as another distribution avenue for their programming. However, there are rights management issues involved. Can you give them confidence that they are not going to be violating their rights agreements if they distribute via the Internet?
WS: Fortunately for our clients, we have the capability to black out any part of the globe. Iowa Public Television, as an example, might have access to content that its owners might not want shown in Pennsylvania or Western Europe.
That’s not a challenge for WhiteBlox. We simply black out those areas. As for the state of Iowa, we’ll typically be asked to black out that specific geographic area. This Geo-specific Blox feature enables seats to be filled at a specific Iowa venue and supplement the eyeballs on Iowa Public Television, so we are enhancing ability to seek underwriting dollars in their home state of Iowa. All of this provides a greater return on invested dollars.
IPTVU: You said there are eight different ways to make money with your
system. What are the top few with which broadcasters are likely to succeed?
WS: Obviously there is advertising, but in ways the public has never before experienced. Things such as the ability for the viewer to click directly to the advertiser and buy his product during the event are exciting.
WhiteBlox customizes the advertising delivery system in ways that don’t interrupt the viewing experience but enhance the participation of the viewer. The specialized management system provides the advertiser with written documentation of exactly who has seen his ad, had a specific interest in his product or service, and a means of contacting them.
IPTVU: Broadcasters are facing TiVO, changing viewing habits and commercial zapping. A system like yours offers a completely different set of advertising tools than the 30-, 15- or 10-second commercial. How important will those tools be for broadcasters as the whole television viewing experience transitions from one of linear broadcasting to an interactive on-demand experience?
WS: It all rolls back to interactivity. Certainly, we can insert commercials directly into the content like is currently being done in TV. But with IPTV in the near future, you will be able to take your mouse and roll over a Halston dress that someone is wearing in a ballroom scene of a movie, and be connected with the nearest Halston dress retailer.
All of this is very exciting news for both the retailer and the consumer. We can also overlay “TiVO-proof” commercials into the scenes. This gives viewers the power to choose what information they receive for products. Interactive broadcasting is all about interactivity. It’s putting the power to control in the hands of the viewer something that isn’t possible with traditional content distribution.
IPTVU: Do you have any local broadcasters or station groups that currently are clients?
WS: We are working with Clear Channel at several of their stations throughout the United States. The Sinclair Broadcast Group is another one, as is Good News Broadcast. Both are out of New York.
IPTVU: How long have you been working with Sinclair Broadcast?
WS: We've been with Sinclair for about six months now. We are assisting them with the ability to monetize their content via the Web with the geo-positioning feature. We are working very closely with their leadership team to understand all the various features or Blox they require of the WhiteBlox solution so they can fulfill the needs of their consumers.
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