Though most industry observers predict that video-on-demand will be interactive TV's first financially proven application, auctions also figure to grab a share of the cut. And televised auctions are already giving some couch potatoes a compelling reason to stay home and participate in bidding wars.
For example, on July 12 American Movie Classics viewers will get a chance to bid on memorabilia and other items related to some of Hollywood's most famous stars through a standard Internet connection in conjunction with their TV sets.
The auction is made possible through technology from ibidlive.tv, a Los Angeles-based start-up. That company is not new to the ITV auction space.
Founded in November 1999, ibidlive recently sold a ride on the Goodyear Blimp at Super Bowl XXXV — along with jerseys and other related merchandise — on Fox Sports Net.
"We're bringing auctions to entertainment and entertainment to auctions," said ibidlive CEO Steve Munatones. "We produce TV programs that allow the viewer real-time participation."
While the actual auctions take place in a studio and before a live audience, ITV expands their reach several fold. Bids are placed through a computer logged into the ibidlive.tv Web site, where users can also view product stills and information.
During the auctions — which can last from 30 seconds to three minutes — the bids appear on the TV screen.
"This is a very powerful incentive for the bidder to continue," said Munatones.
Despite the requisite gadgetry and technology, "networks are very interested in this programming," said ibidlive executive vice president of broadcasting and sales Rolfe Auerbach. "It adds compelling content to both new and existing programming."
An ITV-auction component can as much as triple ratings, according to Auerbach, who added that online usage generally continues after the telecast ends. But the company — which does not subscribe to Nielsen Media Research's ratings service — could not provide data to quantify those claims.
The types of merchandise that typically sell well during a TV auction include sports memorabilia, historical items and products related to the programming that's tied to the auctions, ibid-live officials said.
The best sellers of all are real-life experiences, such as lunch with a favorite celebrity or a political figure, Munatones added.
Ibidlive makes its money by collecting a share of advertising revenues and production fees from program producers. It also receives online ad revenue and a portion of gross sales.
The company, which boasts Visa and UPS among its advertising clients, expects to become profitable this year.
Another company that's made significant progress in the ITV auction space is The Auction Channel, a New York-based company that was founded in the U.K. in 1996. The company creates thematic auctions for various programming services.
Thus far, The Auction Channel has conducted most of its business overseas. It programs a monthly, two-hour sports memorabilia auction for SkySports, British Sky Broadcasting LLC's sports-programming service. The company, which has also partnered with CBS and Rainbow Media Holdings Inc.'s MetroChannels, has held over 30 live ITV auctions to date.
"ITV allows participation in auctions without the inconvenience of time or place," said executive vice president Cathy Elkies. Like ibidlive, The Auction Channel enables the viewer to see the gallery and auctioneer on the screen and make bids via the Internet.
Bids also can be placed by phone, with all prices appearing in real time on a computer screen in front of the auctioneer.
Elkies said viewers would be able to enter their bids via remote control by the end of this year or by the first quarter of 2002, depending on compatibility with cable set-tops. Eventually, an entire catalog will be available through set-tops, including VOD clips and other product information. "The real opportunity will be not having to go to a separate site," she explained.
Call-in rates are generally strong, said Elkies, who noted that BskyB typically generates between 400,000 to 900,000 viewers for any one auction. Revenue comes from its 10-percent to 20- percent commission on sales, standard for the auction business. The company also gets a cut of ad revenue, but Elkies points out that each deal is unique.
As the name might imply, The Auction Channel's goal is to evolve into a standalone programming service somewhere down the road, Elkies said.
In February of this year, a third contender entered the ITV auction space: Minneapolis-based home-shopping network ValueVision. The service changed its moniker to Shop- NBC last Friday (June 22), part of its ITV-collaboration deal with NBC.
Powered by technology from Bid.com, ShopNBC has rolled out Bid Bash, a descending auction show incorporating live TV-Internet converged bidding with declining price, declining time, and limited merchandise components. The hour-long show, hosted by Robin Leach of Lifestyles of the Rich and Famous, premiered on April 26, after several weeks of testing.
"We were excited by the reaction of our viewers to this converged auction concept," said ShopNBC senior vice president and chief technology officer Kevin Hanson. "Bid Bash
takes advantage of TV-Internet convergence in a way that enhances the shopping experience through the thrill of a real-time hunt and a high level of entertainment value."
The show allows TV and online viewers to bid simultaneously against each other using the phone or Internet, a format similar to The Auction Channel's. Viewers watch prices drop, and when customers bid before time or the merchandise runs out, they win.
Information and links to available merchandise appear simultaneously in a separate window on the screen.
Another company reportedly planning ITV auction initiatives is eBay Inc., the best-known of online auction sites. Last fall, the company was reportedly close to announcing a television strategy, one centering on daytime online auctions over a major network.
Thus far, the closest eBay has come to this goal has been auctioning an item relevant to a program at the site through a promotion on the related network. eBay officials would not comment on its current ITV plans.
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