The (Re)Selling of Interactive TV

Observe the electronics industry long enough and you might note an interesting phenomenon: Failed high-tech products rarely die; they are just reintroduced ... again and again and again.

A good example of this was the much-hyped AT&T/Western Electric Picturephone, a primitive version of what one might now call "interactive television." The device allowed telephone users to see each other in fuzzy video images as they carried on a conversation.

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After Picturephone's showing at the 1964 World’s Fair and subsequent failure in the marketplace, new versions of the video telephone have been reintroduced by various manufacturers every few years, with corporate assurances that "this time" it will catch on with the buying public.

Outside of a few niche applications such as videoconferencing, video telephones – despite the improving technology – have repeatedly failed to capture the imagination of the masses. The reason, even the manufacturers of these devices admit, is that most of us simply don't want to be seen by others when we talk on the telephone. The video-phone push has always about technology, not human need.

This same "now is the right time" re-marketing effort is currently being applied to the modern concept of interactive TV, a technology that dramatically bombed a few years back with the much-heralded Time Warner Full Service Network "trial" in Orlando, Fla.


Now we are being told broadcasters need two-way capability in order to – as the Wall Street Journal put it – offer "potentially lucrative" new interactive services. This time, we are assured, interactive TV will actually work because of the increase of broadband connections to the home. Besides, say computer industry analysts, broadband companies have to start monetizing their massive infrastructure investments.

Does this sound familiar? Now that we've deployed the technology, we've got to find a way to pay for it. Because we don't know why people really want (or will pay for) interactive TV, we'll keep throwing new applications on the technology and hope something will stick. Again, it's about selling technology rather than serving human need.

Interactive TV shares a nagging problem that has plagued digital TV from day one. Nobody knows exactly what it means. To some it's "video on demand," the long-standing, elusive goal of allowing viewers to watch whatever they want whenever they want it. To others it means adding user-accessible data – exactly what kind of data is still to be determined – to existing television programming.

Others see it as a way to market goods and services directly to viewers. And, to some media companies, such as America Online, it means bringing the online experience to TV in hopes of creating a new kind of entertainment network. To all, however, it means using TV in new ways to sell, sell, sell.


However, just as in earlier years, the reality of implementing any of these interactive television concepts is proving deceptively difficult. Just look at Microsoft, whose latest high-profile efforts in developing software for interactive television has met with embarrassing failure.

Since early August, the software company has taken international heat for failing to meet deadlines to provide interactive set-top box software to AT&T and United Pan-Europe Communications (UPC), Europe's largest cable operator. In confirming the delays, Microsoft noted the software "is a very complex product."

UPC, citing Microsoft's inability to deliver working software, chose Liberate Technologies instead to supply the applications for its new interactive set-top boxes. Scheduled for rollout this fall, the latest boxes are supposed to give cable subscribers e-mail and Web browsing capability, as well as video-on-demand and e-commerce features. AT&T is facing similar difficulties with software delays for its U.S. interactive cable system.

Yet, even with these highly visible failures, Microsoft announced in early September that it will include digital television software in its next consumer version of Windows. In making the announcement, however, the software giant went out of its way to insist this does not mean the company is ending set-top box development.


There will be room for both the personal computer and the set-top box to deliver digital television, insisted Ed Graczyk, Microsoft TV's marketing director. The idea, he told reporters, is that set-top box features will become part of a larger home-computing network.

Though Microsoft's announcement focused on a new consumer version of Windows that will be based on the company's business-oriented Windows 2000 platform, the company is currently touting its new Windows ME platform as a home-entertainment hub.

Introduced on Sept. 14, Windows ME does not include interactive TV features but emphasizes multimedia entertainment functions such as the sharing of home video, photos and music, using home networking.

However, initial reaction to the new Windows ME operating system has been less than glowing. The multimedia features, reviewers report, have caused the operating system to become unstable and crash-prone.

In a scathing column titled "You've Been Windowed," Interactive Week's Editor-in-Chief Rob Fixmer wrote that Windows ME adds "more bugs than an industrial-strength ant farm" and blamed consumers for continuing to buy faulty software. "Hardware and software makers have no incentive to improve the quality of their products, because we consumers just keep buying more stuff that doesn't work."


Walt Mossberg, technology critic at the Wall Street Journal, wrote that Windows ME "caused more problems than it solved," and he recommended that computer users not upgrade. "Microsoft owes its home users more," Mossberg wrote. "This is a fabulously wealthy company with armies of brainy employees. It can do much better."

With this background, we await the arrival of the next generation of interactive TV.

Frank Beacham

Frank Beacham is an independent writer based in New York.