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Text TV: R U Watching?

A great migration of viewers is underway. Television screens have been deserted by viewers for the computer screen. TV broadcast revenues are falling dramatically and the question whether TV can even survive hovers in the background. But there’s a ray of hope that could bring viewers back to television. And it exists in the form of an edgy new trend: Text TV.

Text TV is a way for television viewers to interact with each other and send text messages directly to their TV screens. Viewers can become a part of the show and see their text messages scroll across the screen as they’re watching TV. In addition to posting messages, viewers can create content, and ultimately interact with other viewers in addition to the entertainers and the show program.

Most importantly, text TV provides a powerful tool to address one of the greatest challenges facing broadcasters today: Keeping younger audiences interested and involved. Broadcasters are searching feverishly to find ways to keep this set of viewers coming back. While cable, satellite, and the Internet have led to loss of television viewers, mobile devices in particular have captured the attention of the teen set. As mobile phones inevitably become the dominant personal entertainment device for consumers, and especially for teens, text TV is a natural next step for broadcasters to leverage mobile connectivity.

In the U.S. alone, 44 billion SMS text messages will be sent in 2007, a 300 percent increase from 2005, according to research firm IDC. And 80 percent of these messages are sent by 12- to 30-year-olds. What's also interesting is the spending power of U.S. teens—about $124 billion a year.

This demographic has specific marketplace demands and will participate in new trends if their needs are met. Social networking sites prove teens have a thirst for interaction and the desire to personalize their approach to the world. Individuals star in their own profiles, and text TV will provide them with the opportunity to star in real time. And this ties into another important demand of the youth market: Instant gratification. Mobile technology is providing the answer to these needs by powering interactive television. Text TV is shaping up to be the next big thing for broadcasters to capture the attention and interest of the fickle and demanding youth market.

Connecting these elusive customers to content is an important component for success. Interactive TV makes it possible for a wider variety of mobile media and entertainment content and services to be made available to a diverse spectrum of viewers. And the youth market isn’t the only area of interest. Specific communities can be addressed with targeted content. As this new concept emerges, it means that an increased demand for independent programming will take place. The programming will then be distributed via up-link to satellite and also made available to partner stations and local cable affiliates for even broader distribution.

The upside is that all members of the value chain can benefit by leveraging multiple vendor, operator and content partner relationships. This opportunity creates compelling value propositions for every member of the value chain. Multiple vendor, operator, and content partner relationships can be leveraged. The more parties involved the more benefits for everyone—from viewers to vendors.

Traditional telephone companies are entering the television market and will be able to create streams of revenue from multiple business units that range from wireline to wireless. Wireless operators will have new opportunities to tie branded multi-partner promotions together and keep customers on board. MVNOs (Mobile Virtual Network Operators) will also benefit. As can be seen, entertainment companies from Disney to Fox Sports want to create a branded experience for viewers to personalize—and text TV offers a powerful tie-in to further these efforts.

On the mobile side of the house, text TV opens the door for more programs to be offered utilizing mobile interaction to enhance programming and draw in more users who otherwise might look to other mediums for entertainment. Interactive mobile content and services advertised during programs that include videos, concerts and music content all generate revenue. The sale of mobile text alerts and participation in mobile text chat and dating, plus participation in IVR (Interactive Voice Response) services are on the horizon. All these sources of revenue collected by the service/content provider are shared with broadcast partners.

With the consumer now in control, the marketing mix is now radically transformed. Services in hot demand include live mobile text to screen chat, text games, voting, polling, and trivia. Vendors of mobile content such as ringtones, wallpapers, and games have more opportunities than ever before to create partnerships in conjunction with content to target specific communities.

In European and Asian markets, viewers have overwhelmingly responded to offerings. Stations in Europe and Asia are running text messaging 24/7 with trivia games, dating and horoscopes among popular topics. A station owner in Finland reports revenues of 15 million euros per year via interactive TV services (and only 5 million people live in Finland). Kagan Research estimates that in the U.S., the interactive services segment will generate $780 million in operator revenue by 2009.

And text TV is already starting to take off in the U.S. Wildly popular "American Idol" has successfully utilized text messaging for viewer voting. And stations in Los Angeles, Detroit, Indianapolis and Phoenix are using "participatory" text messaging television. Music video station KPHE in Phoenix plans to increase availability of its service from eight to 24 hours a day. On busy days, the station has received up to 3,000 text messages. At around 99 cents a pop, the potential revenue opportunity is compelling.

The broadcast industry is entering a new and exciting era...and it’s time to turn on the TV, tune in and start texting.

Ian Eisenberg is president of Blue Frog Mobile, a Seattle-based media and entertainment company and the provider of TXTV services to television broadcasters in North America.