Gary Arlen /
09.20.2006 12:00 AM
HSN's Remote Shopping Sparks New Interactivity

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HSN's "Shop By Remote" service features an interactive TV overlay prompting viewers to order the production on display.
When Time Warner Cable launched "Shop by Remote" on its Hawaiian system last month, momentum picked up for the next wave of interactive TV.

Using standard remote control devices, viewers can click on a "buy" icon in the upper right corner of the screen when they are tuned to Home Shopping Network--triggering a purchase of the product being offered. HSN expects to roll out remote-control ordering to many more cable systems in the coming year.

Although the spontaneous ordering concept has been bruited about for nearly 20 years, HSN's new push into T-commerce (interactive TV commerce) could be an important milestone. HSN's parent company, Barry Diller's InterActive Corp. www.iac.com , has spearheaded many e-commerce initiatives, and this venture signals an aggressive uptick in on-demand TV beyond ordering movies.

It's also a participatory gauge of whether the booming e-commerce world (now generating nearly $90 billion in annual sales) can transfer to TV. InterActive Corp. has a proven e-commerce track record; its current ventures include Ticketmaster, LendingTree, Match.com and the search engine Ask.com. A year ago, IAC spun off its iconic travel businesses (including Expedia and Hotel.com). The company certainly knows how to handle electronic transactions.

Moreover, the Shop by Remote project may help HSN build its core business. HSN pioneered the TV shopping category, but currently runs a distant second to QVC, with about half the annual revenues ($3 billion for HSN compared to QVC's $6 billion).

Shop by Remote uses Tandberg Television technology at the set-top box and at the cable headend to process each order. The Tandberg Interactive TV platform includes software that delivers the application to the set-top box and displays and manages the application throughout the ordering process.

The Tandberg technology also communicates the orders from the cable headend to HSN's central order processing system and then confirms the buy back to the viewer.

Viewers can use their current remote control and set-top box for the process. The Tandberg technology is based on interactive TV software it acquired when it bought GoldPocket Interactive last year. The solution requires a software download into the set-top, a Time Warner Cable spokesman said.

Although the Hawaii deployment runs on Scientific-Atlanta set-tops, a Tandberg Television marketing officials said that it will roll the service out "to all set-tops for which HSN has the appropriate distribution deals, including all capable cable and all satellite boxes."

An HSN official confirmed that the telemerchant plans "on making it available to all systems, regardless of their set-top box." Cable operators do not pay any extra fee for using the interactive ordering system--and are presumably motivated to put the software into their headend and set-top equipment for the value of increased sales commissions from HSN.

SIGN-UP REQUIRED

Viewers must register to use the HSN remote service by phoning HSN or setting up an online account with credit card information and shipping address. The actual ordering process may take up to 20 clicks on the remote control--a potential user-surly hurdle, but one that seems necessarily to assure legitimate transactions (and prevent kids from abusing the easy-order process).

The remote process takes about 30 seconds, according to Scott Sanborn, HSN's senior vice president for marketing. That's far faster than the typical two-minute phone-in ordering time. Shoppers can customize their orders, specifying quantity, color, size and other factors--just as they do via HSN's phone-in and online systems. Order confirmations appear on the screen after each purchase.

HSN anticipates growing comfort levels with e-commerce will generate usage of on-screen ordering--especially among the growing coterie of tech-savvy women, who are HSN's core customers. Company spokesman Brad Bohnert said that it's "too early to say" what percentage of total sales will come in via Shop by Remote.

"Our original intent... is to provide a service to our customers," he said. "Attracting new customers and sparking additional sales would be a bonus."

In a low-key pilot project of the same remote technology that began in spring at Cablevision Systems in Long Island, N.Y., HSN logged "thousands" of orders, Sanborn said vaguely in published reports. Other sources indicated that HSN generated several hundred-thousand dollars during the Long Island trial, even though there was no promotion for the remote ordering feature.

All HSN items will be available through the remote service as it moves into other markets, although the schedule for that expansion is not yet clear.

In many ways, HSN's venture with Tandberg Television may become a key demarcation point in the long and bumpy road toward interactive TV. At a time when there is so much talk about "participatory" video and media's movement toward Web-based video, the relatively simple addition of an on-screen ordering system seems archaic--almost insignificant. Yet, the timing may be ideal--as digital consumers transfer their ordering fingerwork from a computer keyboard to a TV remote control.

QVC offers similar on-screen interactive shopping capabilities through its operations in Britain and Japan, where the interactive TV infrastructure is more robust. Last year, QVC United Kingdom, handled more than 1 million orders using the BSkyB remote control button.

But QVC is not publicly speculating about its U.S. interactive agenda--admitting only that it is looking into such services, and acknowledging that its corporate culture rarely assumes the "first-mover" role.

Another factor in the interactive TV migration is the need for standards, which cable TV and broadcast organizations have been debating for decades. Big cable operators see click-to-order as part of an objective to beat satellite and telcoTV ventures.

A Time Warner Cable official acknowledged his company is "committed to industry standards as the best solution" for interactive ventures. He said that TWC "will only do limited market deployments with programming partners... until industry standards are implemented and supported across the board."

HSN's new initiative could mean that standards expectation is not so remote after all.


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