[opendtv] Re: News: DIGITAL TV OPENS UP TWO-WAY OPPORTUNITIES

At 8:53 PM -0500 2/28/08, Albert Manfredi wrote:

Craig Birkmaier wrote:


 Targeted advertising is going to be VERY important. But it will
 probably need a back channel to close the loop with the
 audience.
As always, I disagree on the "back channel." This would take away two of the biggest advantages of OTA broadcast: simplicity and scalability. 

Clearly you do not have a clue about what i am talking about.
Broadcasters need to know who is watching, not just vague demographics provided by the ratings services. Cable systems know what you are watching; DBS systems know when you order a NVOD program. Tivo knows a great deal about what you are watching. And Internet download sites ARE ALREADY inserting ads that are targeted to you.
This is not about simplicity or scalability. It is about the survival of the medium.
I am not suggesting that consumers would use the back channel to initiate a program or commercial download, although this is possible and has been done with analog television - there have been a number of successful music video "jukebox" services where you call a phone number and ask for a particular title, which is then placed into the playback queue.
And it is NOT about Directed Channel Change, which is a complex, real-time kludge to deliver targeted ads. DCC can be useful for localization; for example, an electronic equivalent of the various local editions that many newspapers publish in large markets. With DCC a station could have multiple local news inserts that would cover specific zip codes. By entering your zip code into your receiver/STB, DCC would switch to the correct local insert for your zip code.
The back channel is a valuable tool that broadcasters can use for two main things:
1. to develop a personal relationship with each viewer. This would be viewer initiated, and would allow the viewer to enter a profile that would then be used to allow for localization and customization.
2. To download content directly to a receiver via the back channel - content that can then be switched to - NOT SPLICED - allowing for localization and customization.
By the way, it is not necessary to use the back channel to download customized content to your receiver. This can alos be done by pushing content to your receiver via OTA broadcasts. For example, a station could broadcast all kinds of ads overnight - your receiver would record those ads that match your profile, and these ads would be inserted when you watch broadcasts from that station.
I could go on and on, but I think most of the people on this list understand what i am trying to convey.
And as we saw with the RAI "interactive" channel, so far anyway, it does not depend on any such return channel. Instead, you tune to the subchannel, wait some, and then you get the "interactive" info stored in your STB. So interactivity stops at the STB. They will provide phone numbers or URLs, if you need real interactivity. Just move over to the telephone or PC and get interactive. (I'd like to know how successful that has proven, in the test markets.)
Yes, this is also a viable way to deliver interactive content. But with a back channel, you could just connect to the stations server to gain access to this extra info.
Others have commented on the economics. My only addition would be that the only way for such a scheme to pay for itself is for advertizers to pay a meaningful premium to broadcasters, for the privilege of having their ads directed. This could be done in a one-way broadcast, but only with a small number of ad options. And you don't need any form of IP encapsulation either, unless you want it for snob appeal.
Advertisers are DYING for the ability to do this. They fully understand that shot-gun advertising is WASTED on the majority of the audience.
I have used an example in the past that goes like this. You go to a car dealership and take a test drive, and the salesman gets some info about you. Rather than calling, or sending you stuff in the mail, the dealership buys some ads that are inserted JUST FOR YOU. These ads could even have personalization. The station would deliver these ads to your local cache, then when you watch one of their programs these ads would be inserted just for you. ALL OF THIS IS QUITE FEASIBLE TODAY.
With or without "back channel," the broadcasters would have to figure out how to get the new-design STBs or integrated receivers out to customers. It would take another FCC mandate. The NAB doesn't seem to have much clout with the CE vendors. And I would expect that the MVPDs would oppose any such NAB attempt strenuously, for instance, which in turn would make the broadcasters quickly back off.
It WOULD NOT TAKE ANOTHER FCC MANDATE. It would only require that broadcasters start innovating so that they can survive. If the industry developed and supported a useful STB with caching and an Internet connection they could promote it easily, just like cable system fill up unsold avails with promos for their services. All that would be necessary is for the stations to deliver some services that people want - like a cheap movie rental service not unlike Moviebeam.
Same objections to this would also exist in the MVPD nets, if more customers would resist having proprietary STBs installed in their homes. If customers don't resist, such boxes could be designed for the MVPDs, who will in turn take the additional ad revenue and charge the marginal extra cost of the boxes back to the customers, via the monthly fee. Will the customers be given the option, or will they be graced with these boxes no matter what?
These boxes are already starting to become available. Apple TV is an excellent example. With the addition of an ATSC tuner and some software stations could do this today. And Apple would have a big pipe to download HD movies to their customers... 

Regards
Craig


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