FT. Sep 2001. Gaming and Gambling on Interactive Television
Sceptics could be forgiven for arguing that
some of the games currently available on interactive television
(iTV) barely warrant the name. The gameplay does not stand comparison
with that available via a console, and some seem like little more
than an excuse to entice the viewer into making a premium rate
phone call to see what prize he has won.
In fact, however, says Rob Gray, managing director of integrated
marketing agency Mercier Gray, which has worked with a number
of games companies, including Infogrames and Codemasters, the
simplicity of games on iTV is key to their appeal.
"Some of the console games have become so complex now that
it's a breath of fresh air to play these quite simple games"
he says. "They are still challenging and they are worth playing,
but in a different way. They are really quite a quick fix compared
to the time needed to play a typical console game."
He may have a point, for iTV gaming is immensely popular. According
to statistics from the Broadcasters' Audience Research Board (BARB)
the Playjam games channel on Sky Digital's interactive service
in the UK consistently ranks among the top 10 most popular channels
among the 16-34 age group. The channel averages 83 million gameplays
per week, with users spending an average of seven minutes on each
game session and 31 minutes on the channel.
On the back of figures like these, the analyst Datamonitor is
predicting that iTV gaming (including both games and gambling)
will generate revenues of $1.5 bn in Europe, and $2.7bn in the
US and Europe by 2006. These revenues, it says, will come from
betting via the television set, from standalone games (things
like Tetris or Battleships), and from "enhanced TV"
(eTV) shows, in which viewers are charged a small fee in order
to participate in a broadcast programme from home, with the incentive
of winning cash prizes.
According to Datamonitor technology analyst Jacob Hayler, it is
these eTV shows which offer the greatest potential for revenue
generation. He argues that programmes like Big Brother, whose
second UK series recently generated 5 million votes via iTV (around
30% of the total) at a cost to the viewer of 25p per vote, prove
the potential of the concept.
"Enhanced TV has a much greater opportunity to create cash"
says Hayler. "People don't interact with the TV in the same
way they do a games console, but as the Big Brother experience
shows, they will play along with a TV show."
Two Way Television has more experience than most companies of
developing this type of programming. Established in 1991, the
company has spent the past decade developing its core proposition,
described by managing director Matthew Tims as: "playing
along live with TV programmes for fun and profit".
Having declined to launch on analogue TV, Two Way TV now appears
on digital platforms in the UK, Australia and Israel. Its current
line-up consists of standalone games and quizzes, and it will
launch eTV shows later this year.
Despite the time spent developing iTV programming, however, Tims
claims the company has learned little over the years: "Things
we thought were true when we started out, we still think are true
now" he says. "We always suspected that if you give
people the opportunity to do something useful, learn something
worthy, or to have a good time, they will tend to go for the good
time, and so it has proved."
While eTV may have the greatest long term revenue-earning potential,
Stuart Jackson, head of interactive television at the new media
agency OgilvyInteractive, argues that standalone games are leading
the way now in developing a solid revenue model.
He points to the success of games such as Tetris, which generated
£1 million of revenue in the two weeks following its launch
on Sky Digital in the UK, and Tetris, which clocked up 1 million
plays at 25p per play in the two weeks after its launch. And the
broadcasters, he says, like games for more than the direct revenue
they bring in.
"In the digital TV market, people tend to skip from channel
to channel" he says. "But gaming encourages viewers
to stick with the channel they are watching or interacting with
in order to complete the game. It discourages surfing and gives
people an incentive to keep watching and participating so they
don't lose their score."
Set-top box maker Pace Microelectronics says that although this
"pay-per-play" business model is likely to survive,
the development of set-top boxes with built-in hard drives will
fuel the emergence of a subscription model, in which iTV viewers
will pay a monthly subscription fee of around £10 in order
to have access to around 20 good games, downloaded to the set-top
box, with around half of the games refreshed each month.
The third leg of the iTV gaming stool is gambling, pure and simple.
As on the web, gambling offers platform owners a relatively surefire
way of generating revenues. Indeed, iTV arguably offers even greater
opportunities for betting content providers.
A start-up, Global Interactive Gaming (GIG) wants to enable viewers
in Europe to bet on "propositions" it presents during
the course of a football match or other sporting events. Using
money from a prepaid account, viewers could choose to take on
bets offered during the game, on which team would score the next
goal, or even something as random as whether there would be a
throw-in in the next 10 seconds. It is currently negotiating with
platform operators to adopt its technology. GIG chief executive
officer Cees Zwaard refutes suggestions that he risks creating
a nation of armchair gambling addicts.
"We will build in whatever we have to build in in terms of
software to track where problem areas will be, but we don't expect
any problems" he says. "(Viewers) can't lose what's
not in their account, so if they open their account with £25
in it, that's all they can lose."
But Bill Goodland director of content development for NTL Home,
which plans to roll out a similar service at the beginning of
Q4 this year, admits: "we will need to take extreme care
about all the obvious issues. There will be a number of consumer
groups with perfectly reasonable and justifiable concerns about
how intrusive the proposition is when it's presented."
Both, however, are offered some words of encouragement from
Datamonitor's Mr. Hayler, who says:
"I don't believe that all of a sudden, just because this
service is there, everyone is going to start blowing their mortgage
on watching the football. I don't think there is a dangerous social
issue here."
Perhaps not, but those who get hooked on watching football this
way will have to bet astutely if they are not to end up losing
their replica shirt.
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