A Guide to Interactive TV
Become an Early Rejector!
by David Burke

What Is Interactive Television

The average person in Britain or America spends a quarter of his waking life in front of the TV set, perhaps saying "it's like having someone in the room." Meanwhile, because of television, we are less involved with other people. We have fewer conversations, and fewer people who know us intimately.

But a new type of television is being developed. Millions of dollars are being spent to create a device that really is someone in the room with you. Matthew Timms, head of programming at Two Way TV in London describes this digital revolution you have heard so much about:

"..somehow they feel they're sitting there, it's just them and the television - even though the reality is it's got a wire leading straight back to somebody's computer. So it actually gets sort of interesting information back."

Timms is talking about his customers, the people who pay him money each month. Perhaps they were attracted to his company's subscriber list by its promises of Choice, Fun, Convenience, and Empowerment. Control - that's what interactive television offers. Sitting on your couch, you will soon be able to have almost any product or service you desire, delivered at the touch of a button.

But what if you prefer to monitor people in their homes, any time, day or night? What if you want to build up, over years, psychological profiles of individuals from a distance - what motivates them, what makes them anxious, what makes them jump? What if you want to use that knowledge to manipulate what they know, how they feel and, finally, what they do?

Interactive television can deliver that as well. It can provide all this control, to any company or government that is able to pay the money. "We can build up profiles of people," says Two Way TV Managing Director Simon Cornwell, "based on what they say and on their actual behavior. Eventually the product will target itself to individual customers and what one customer sees will be very different from what another customer sees."

Interactive television will be used to invade viewers' privacy. Contrary to what you might have heard, this is important, because privacy was never about information; it's about power - the individual's bargaining power with the rest of the world. If you have nothing left to hide, then your negotiating position is impossibly weak. Your free will is exposed to tampering, and you may have much to fear.

If asked, people who work in interactive television will admit that this technology creates experimental conditions in the home. The machines that control your TV set will show you something, check to see how you react, and then show you something different. That's not just convenient. It is a loop of stimulus, response and measurement as carefully designed as those boxes where rats hit buttons to get food and avoid electric shocks.

And if you want to know more about those rat boxes - what year they were first used and whose theories they were built to test - ask someone who has passed his or her Chartered Institute of Marketing exam. The people who sell it call interactive television "a convergence". And it is, of so many things: marketing, child-psychology, sociology, advertising, public relations and politics. Not to mention complex adaptive systems software.

But how will it affect your life? You are about to accept a powerful new device into your home, and interact with it every day for an average of four hours. That is half the time you are not sleeping or working, for the rest of your life. What is this machine designed to do? Look inside your digital set top box, and you will see much more than a TV tuner. It is actually a computer worth hundreds of dollars. Just like a PC, it contains, or will soon contain, all these components:

- Memory - processes data and runs programs. As with any computer, the functionality is not built into the hardware. The box will do whatever it is told by the software.

- Storage - flash ROM at the moment, but within a couple of years it will be replaced with something more powerful, perhaps a hard drive. This will allow the box to store software and data, even when turned off.

- Modem - or a network card, which allows data to be sent back and forth over a public network. Some boxes use a phone line. The more powerful ones use coaxial cable.

That is a lot of power. Best of all, you get it cheap, or for nothing. The digital TV companies have offered to subsidize or outright buy these computers for you. Profits crashed a Rupert Murdoch's BskyB Corporation, and shareholders had their dividends frozen when the company decided to pay £315 million to give each of its current subscribers a free box. That was just the beginning. Now it must also buy a box for every new customer. Why are they doing this? Why would somebody just give you all that hardware for nothing?

Here's a hint: You have no control over what it does. Unlike a normal PC, you have no say over the hardware or software. You can't add or take out bits and pieces, you can't start, stop, install or uninstall new programs. And, in the case of Sky Digital, if you choose not to plug your modem in, you'll lose your "Interactive Discount" and have to pay them up to £248. That makes interactive TV a service you pay not to have.

It is hard to find out the truth about this machine, and decide whether to accept it. The only people who know anything, and are doing all the talking, are the companies trying to sell it. And they haven't been telling the whole truth, not in their television commercials, glossy booklets or their carefully worded contracts.

So we wrote the book Spy TV to present some of the missing facts. It describes the engine of this two-way television, following data "straight back to someone's computer" and then back into individual living rooms. It lays out those analytic techniques that will be used to extract "sort of interesting information" and attempts to foresee how the use of such information will change us.

What Is Interactive Television?

Interactive TV (iTV) is any television with what is called a “return path”. Information flows not only from broadcaster to viewer, but also back from viewer to broadcaster. Another feature common to all iTV systems is the ability to offer each TV set, or each viewer who uses that TV set, a different choice of content.

There are different hardware configurations and it is possible to build a crude interactive service using analog systems. But the type of systems now being offered, that will dramatically change how viewers live, are digital – either cable or satellite.

People are talking about interactive television for three main reasons:

  • T-commerce: You will be able to buy a pizza without dialing a phone.
  • Interactive Goodies: You will be able to pause live TV or record shows. You will be able to click on advertisements to “find out more”.
  • Click stream Analysis (“telegraphics”)

What Was That Last One?

Viewers will be told a great deal about the first two uses for interactive TV. If you are not seeing them already, prepare for a blizzard of advertisements showing happy families ordering gifts through their TV sets, choosing camera angles while watching their favorite sporting events and sending email to friends. Expect to hear words such as “control” and “empowerment”.

But it is time that viewers and reporters and legislators started asking about that third use for iTV. Go to any trade show of interactive service providers and you will notice it there, lurking below most conversations. The issue no one likes to talk about.

Interactive Television Spies on Viewers

With interactive television every click of your remote control goes into a database. This is called your TV set’s “click stream”, and it can be analyzed to create a surprisingly sophisticated picture of who you are and what motivates you (sometimes called “telegraphics”). Such profiles of households or individuals can then be used to target consumers with direct marketing techniques, through their television, in the mail or over the phone. Your television will be able to show you something, monitor how you respond, and then show you something else, working on you over time until it you exhibit the desired behavior.

Even if you never do order a pizza through your TV set or click or help your child play with an interactive commercial, your iTV set will be ‘interactive’ all the same. What matters is your “click stream” and the people you have never met who will soon be studying it. Such observation and manipulation is not marginal or accidental. From the beginning, it has been built into the designs of interactive systems and the revenue columns of these companies’ business plans.

White Dot Blows the Whistle

White Dot has been investigating this new technology for three years. Our book Get A Life! (David Burke and Jean Lotus, Bloomsbury Publishing - 1998) first raised these issues of privacy and interactive television. Our second book, Spy TV (David Burke, Slab-O-Concrete - 2000) was written specifically to expose what the industry had in development, and where it plans to go.

Spy TV was written as a concise viewer’s guide to the hardware, the software, and the privacy issues of this new medium. Based on dozens of interviews with interactive television developers in Britain and America, Spy TV cuts through the hype of this “digital revolution” to found just who is being overthrown.

Much of the following abbreviated description is taken from Spy TV. Order a copy of Spy TV from Amazon.com, Amazon.co.uk, BarnesandNoble.com, BOL, or Borders.com.

Much of the following abbreviated description is taken from Spy TV.

This year, White Dot assisted the Center for Digital Democracy and Privacy International in producing TV That Watches You: The Prying Eyes of Interactive Television, an authoritative survey of iTV’s threat to privacy in the United States.

Who is Making Digital Interactive Television?

If you wish to understand interactive television, and plan to start asking questions, these are the types of people whom you will want to call:

  • Box Makers – Companies like Motorola, Scientific Atlantic, Pace and Microsoft are making set top boxes that run interactive television.

These manufacturers are incorporating into their set top boxes support for the kinds of data collection they think will drive sales to the service operators. They announce with fanfare their partnerships with companies that plan to gather and analyze viewer data. Motorola, for instance, is a major investor in SpotOn, a targeted advertising system.

Bob Evans, SpotOn’s West Coast Head of Sales was justifiably proud when he pointed to one of his boxes at a trade show and told me:

“See that box? That box can hold 64,000 pieces of information about you!”

Each digital set top box, from any manufacturer, has an individual IP address, making it uniquely identifiable. Some boxes provide memory to hold a viewer’s data until it can be sent out of the house by telephone call, known as “store and forward”. Others provide software applications with information about other devices connected to the set top box – printers or a computer network.

Many people in the industry predict that the set top box will eventually become the network gateway into the home. All electronic devices, and soon even appliances, will be linked to your television. It will be able to record not just every click of your TV remote, but every time you go to the refrigerator.

  • Multiple Service Operators (MSO) – Like an internet service provider (ISP) an MSO offers access to content. But unlike the internet, where the content comes from anywhere, interactive television is gathered together buying and bundling.

Service Operators like Cox and AT&T are now buying from, or just buying up, smaller companies that produce the new data collection applications.

  • Network Operators – These are the companies that own the cabling or satellites that carry the signal. They will usually offer their own services such as interactive television and broadband internet access, but there is no technical reason why they cannot carry other company’s services.
  • Operating System Providers – These are software companies such as Microsoft, Liberate and OpenTV that provide software operating systems that run on set top boxes. They are the equivalent of the Windows or Linux operating systems that run on PCs. In fact, both those operating systems are making the migration to the set top box.
  • Middleware and Development Tool Providers – Set top box middleware, offered by OpenTV, WorldGate and others, simplifies life for application developers, by offering easy access to various system functions. Also, by offering the same middleware interface on top of multiple operating systems, middleware providers hope to encourage developers to use their development tools to create a large body of cross-platform applications.
  • Application Providers – These can be software houses that have their own operating systems and tools, such as Microsoft, or they can be small, niche companies that specialize in some business need that interactive TV might fill. Their software will be used to produce iTV programming and advertising, or run interactive services over the networks.

These companies have done much of the innovation, thinking up new ways to gather, analyze and use information. Their products are now being taken up by the MSOs, networks and box makers who will put them in people’s homes.

  • Program Content Producers – These people make television programs and advertisements that contain interactive elements. They will be commissioned by advertising agencies, television broadcasters and MSO’s.
  • Advertisers and Manufacturers – Commission new interactive content, as they always have done. But with interactive television, they also benefit from or co-ordinate the use of data taken from viewers’ living rooms.

Advertisers and manufacturers are being wooed by the people making iTV. Some companies, like Proctor & Gamble, Ford Motors, Domino pizza and some advertising agencies, like JWT and Starcom Worldwide have been enthusiastic participants.

· Data Analysts – There are a number of companies that specialize in holding and analyzing consumer data. Some are huge data warehouses, some are small consulting firms that just do analysis. These companies have experience with direct marketing, and are now moving that experience into a world of faster turnaround, where cycles of offer, response and new offer will happen in a matter of hours instead of months.

Notable among these companies is Nielsen, which has been counting viewers for decades. Knowing that set-top boxes could turn every single household into a “Nielsen Family”, they have sought to do deals with almost every company doing interactive television.