DBS’ Long Interactive Reach

Cable operators and satellite distributors have been building momentum in the development of interactive TV applications. You can’t skip a week or two without news of an MSO or DBS provider launching ITV content or advertising. Not so long ago, the chance of an ITV application appearing somewhere in the multichannel universe was an every-few-years proposition at best, with Qube and Full Service Network tops on the short list of trials never graduating to nationwide adoption.

Now, Time Warner Cable has ITV service available in all of its major markets, Charter is spreading the gospel of Digeo and Cablevision is expanding its lineup of OptimumTV games. As for satellite players DirecTV and EchoStar, their powerful interactive TV arsenal continues to get larger, considerably larger.

EchoStar’s ITV lineup includes CNN and Bloomberg info updates, on-screen billing, horoscopes, movie stats from Showtime and Reebok ads on ESPN’s Monday Night Football. On DirecTV’s lineup: local weather maps, player profiles available during NFL Sunday Ticket games, bonus camera coverage during certain sporting events and lottery news. Fans of Sudoku and similar puzzle diversions on DirecTV can look ahead to a “Game Lounge” channel next month.

When a satellite distributor launches such interactive features, however, 15 million (via DirecTV) or 13 million (via EchoStar) can try it immediately.

“That’s our edge,” says DirecTV Entertainment EVP Eric Shanks. “Cable’s ITV is deployed market-by-market, while our products are all available everywhere.”

“Our size and reach is significantly bigger than cable’s,” says EchoStar interactive programming director Scott Higgins. “That automatically makes your situation unique.”

Nation-wide penetration also helps DBS attract national advertiser involvement for ITV. EchoStar’s ITV sponsor revenue is increasing monthly, Higgins says. “It’s not sizable for us yet,” says DirecTV’s Shanks. “But over the next few years, it will become a significant portion of our overall ad revenue.”

Blunting DBS’ ITV Edge

Rolling out switched digital video, IPTV, all-digital and other bandwidth-conserving technologies should help cable operators launch ITV applications across large swaths of their footprints, says Dr. Robert Raciti, SVP with GE Commercial Finance’s global media and communications unit. Operators like Comcast can then introduce an ITV application in all of their markets simultaneously.

“The trick beyond that is to offer more forms of ITV and create applications where customers perceive extra value, possibly through user-generated content and games,” Raciti says. “The more ITV [operators] offer, the more likely their customers will stay put.”