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Portal, Schmortal — It's the IPG That Counts

In the rush to evangelize interactive television, there has been much discussion regarding ITV portals. What constitutes a portal? Who owns it? Who controls it?

Providers of television-portal technology seem to have reached a consensus that cable operators will own the ITV portal. However, this discussion sidesteps a very critical element: Who is going to own and control the most valuable application found within the ITV portal?

The tendency within the industry is to tout the ITV portal as the
critical piece of television real estate — the hub of consumer interactive applications. In reality, the portal is simply the user's point for accessing applications. The true value is in the applications themselves.

What cable operators cannot lose sight of is the fact that the most crucial application available is the interactive program guide. Regardless of the number of interactive applications that will be incorporated into the portal, the fact remains that cable subscribers will most frequently turn on their sets to watch television. For the viewer, then, the IPG is the application that makes life easier by providing a tool to effectively navigate among programming options.

From the cable operator's standpoint, the IPG is a critical tool to support programming options that generate revenue. Through the use of an effective IPG, operators can maximize their business by providing easy and efficient access to programming options such as premium channels, pay-per-view and video-on-demand.

In addition to basic program navigation, the IPG is crucial for personal video recorder functionality, which we believe will be commonplace in set-top boxes of the future. Furthermore, IPG technology should allow the cable operator to exploit branding and advertising opportunities.

While the portal may be the "front door" to the ITV household, it is the IPG that unlocks its true revenue potential. Operators should keep the keys to that guide in their own pockets so that they maintain control of their business and fulfill their obligations to the subscriber, while reaping the benefits the IPG has to offer.

So, while the industry continues to address who owns the ITV portal, the more relevant question becomes, who controls the IPG?

Cable operators have worked for more than 50 years to position themselves as the conduit for the consumer's home-entertainment needs. As cable television advances into the ITV age, it is critical that operators retain control over the IPG and its associated advertising, branding and television-commerce opportunities and its integration into other associated applications, such as personal video recorders.

With interactive television applications projected to be in 46 million homes by 2005 and revenue expected to be in the billions, the financial implications of controlling the way in which customers navigate television programming are tremendous. Therefore, cable operators must offer an IPG that provides the viewer with a convenient and visual way to navigate television, while allowing the operator to keep the lion's share of the advertising and other associated revenue.

As an industry, cable, has enjoyed tremendous success because its founders understood three critical things: the value of innovation, which continued to improve the television experience for consumers and led to increased profits for operators; the importance of being the leading provider of that innovation to their subscribers; and the value of providing customers with unique and exciting programming choices.

Cable operators must build on this philosophy by providing an IPG that allows them to control their own destiny in an evolving interactive world. As we move toward the installation of a digital "front door" in every home, it becomes all the more critical that operators examine their strategy for implementing and benefiting from their IPG.

Now, let's not forget about the subscriber in all of this. With the continuing onslaught of programming options that feature hundreds of available channels, PPV, VOD and other applications, operators run the risk of overwhelming their subscribers with programming options.

As the number of programming options increase, it is imperative that cable operators provide their subscribers with an IPG interface that is both easy to use and visually engaging for the viewer. The IPG must allow consumers to effectively navigate through the myriad of options on television through rich graphics and functionality that are more TV-like and enhance the viewing experience. The IPG must possess exceptional searching capabilities that will allow the customer to easily find what they want to watch among the hundreds of channels available.

The reality that operators must face is that if subscribers cannot easily navigate through the immense quantity of programming options, they may choose not to navigate at all. And if consumers do not use the IPG — because it is difficult or unwieldy — the operator will not fully realize its revenue potential.

What should cable operators expect from an IPG? First, the IPG must have the technical compatibility to work within the parameters of any set-top box or middleware. The design of the IPG should be flexible enough to easily mesh with a larger suite of applications that have a consistent look and feel, enabling ease of use by the consumer across the whole suite and reinforcing the cable operator's own brand identity.

Second, the IPG must enhance the TV-viewing experience. It should be visually pleasing and intuitive — a companion to the rich, immersive, visual experience that the television can deliver.

Third, the IPG must allow the operator flexibility with respect to branding and providing advertising and other revenue-generating opportunities. After all, what would a major advertiser pay a cable operator for the right to sponsor the IPG — the application to which viewers most frequently turn? And what would a company like Nike Corp. pay to sponsor sports programming on the guide? The revenue implications are tremendous, and the cable operator should reap its fair share of the profits.

Cable operators and subscribers both want to be able to justify their investment in interactive technology. By adopting an IPG that they help to design and control, operators will be better equipped to accomplish their business goals. For the viewer, enjoyment and ease of use are major forms of justification; thus, the ability to navigate their television options in an easy, TV-like manner is valuable. As ITV options continue to evolve, the IPG will be the application that most impacts both the operator and the customer.

The evolution of interactive television is challenging the cable television industry to rethink itself and its position in the market. Customers are being faced with more and more choices in the services they can receive and how they can receive them.

At this point in the development of ITV, cable operators must position themselves to reap the benefits of this new industry growth. By designing, owning and managing their own IPG, operators can continue to control the direction in which their business flows.

So, let the portal discussion continue. What is it? Whose is it? Who controls it? Regardless of the answers to these questions, in order to best control their business, cable operators must incorporate into their portal an IPG that is brandable, flexible, and most important — theirs.