Interactive TV producers compete at Multimedia Expo

When today’s top interactive television players show their wares, increasingly, each also reveals significant shortcomings.

At the fifth annual Multimedia Expo, the three current contenders for interactive–meaning two-way–TV struggled to prove their approach is the model for what everyone expects will be an important new market in the coming years.

The predictions of success were extremely bullish.

“Subscription revenues will be $ 6 billion to $ 8 billion within the next 10 years,” boasted Kathy Austin Lockton, at Interactive Network Inc., which doesn’t include potential revenues for advertisers and transaction services.

But getting there has been slow.

Interactive Network has been up and running for several years, giving subscribers a hand-held terminal equipped with a small screen.

This is now available in the Bay Area, and INI plans for it to be nationwide by this time next year. INI declines to give a number of subscribers, but it has been running at a deficit since its founding three years ago.

The current cropof companies, including INI, broadcast their signal via the airwaves, which means they are limited to very simple graphics and text. The viewers’ responses are sent back to the home office either over a phone line or via satellite. This can mean delays in tallying up an “instant” poll or scoring a quiz show.

And last, all but Interactive Network appears to agree that on-screen graphics, where the viewer selects options from a menu with a remote control, is the ultimate format for this medium. That, say the participants, is still a year away.

“Longer-term, we’ll see these applications without a box,” played directly on the TV, said Diana Hawkins, an industry consultant, Interactive Associates.

What’s uncertain is the coming impact of the cable players. Viacom Intl., Tele-Communications Inc. and Time Warner Inc. all will be experimenting with up to 155 channels, many of those interactive. Their first goal, however, is video-on-demand, not playing along with gameshows.

The only successful player in interactive TV to date, NTN Communications, just posted its first profitable month, in June, after several years of operation. In the second quarter, it racked up several million dollars in sales.

NTN charges $ 650 a month to bars, taverns and hotels across the United States and Canada to carry a monitor for its over-the-air games, plus hand-held terminals to interact with.

So far, advertisers have been cool. Miller Beer and Chevrolet have signed on, with the automaker receiving 13,000 names of potential car buyers from one interactive ad.

“I think it’ll take two to four years to get awareness of this, and then it’ll blow out” in revenues, said Dan Downs, NTN prexy. “We predict 20 to 25 million homes will be interactive in 10 years.”

The most ambitious system, TV Answer Inc. from Reston, Va., promises next year to deliver all the listed games, plus it just signed a deal with Domino’s, the nation’s largest pizza vendor, to let its customers call up their nearest outlet.

According to Sandy Smith, TVA’s vice president of marketing, TVA delivers its signal to the home receiver via cellular radio, from towers that will be specially erected in each market, a design that cost $ 75 million to develop.

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