Feature: [itvt] Interview with Maggie Wilderotter

[itvt]: Could you tell us a little bit about your background?

Wilderotter: I was born in Neptune, NJ, on the Jersey Shore. Grew up there, went to college in Massachusetts, at Holy Cross College.

[itvt]: What did you study?

Wilderotter: Economics and Business Administration.

[itvt]: Did you know what you wanted to be at the time?

Wilderotter: No. Absolutely not. I got married right after college, and moved west. Wound up in Phoenix, AZ, for the first 6 months of my married life, working at the Arizona Bank. My husband was a pilot trainee. He was an Air Force Academy grad.

[itvt]: "Top Gun" kind of thing?

Wilderotter: Yes. That type of thing. And then we moved to California, because that was the first place he was stationed: in Sacramento. It was the first time for either of us in California. I answered an ad in the paper and went to work at CableData. I was the accounts-receivable supervisor when I started in 1978. Within a year, I was running the accounting department for the company.

[itvt]: And you were how old?

Wilderotter: 23 years old.

[itvt]: What was your trajectory up to Wink?

Wilderotter: Well, I spent 12 years at CableData, and basically left there as the general manager of US, Canadian and European operations for the company. So I went from being the accounts receivable supervisor to being the person running their top 3 businesses.

[itvt]: And you were only in your early thirties?

Wilderotter: Right. I was then recruited away by Craig Macaw of Macaw Cellular. I spent 5 years at Macaw Cellular, as president of the California, Nevada and Hawaii regions, and built out our wireless networks in those 3 states. So I took the business from about $100 million to $750 million in revenue during that period of time. And then, AT&T bought Macaw, and I moved to Seattle for 2 years as the COO of AT&T Wireless and the CEO of the Aviation division, which are the phones on the planes.

[itvt]: And you weren't thinking about ITV at this point?

Wilderotter: No.

[itvt]: Did you believe that wireless, that is, cellular phone technology, was the thing you wanted to stay with?

Wilderotter: Well, when I was with CableData, cable was the new thing. The late 70's and the 80's were the go-go years for cable. And then I joined wireless at about the same point in the trajectory of its growth curve. But even in the 80's, when I was at CableData, we were the largest provider of management information systems for cable TV, before software was cool. And because we were the billing arm for the cable operators, we did all the interfaces with the early interactive trials, like QUBE and Videotron. So I was very familiar with the early days of ITV, when I was in the cable industry.

[itvt]: These were billing interfaces?

Wilderotter: Yes. So, if you bought something instantaneously, like a movie, we did the integration to the set-top boxes that were the first interactive boxes out there, in order to bill the customer for the service.

[itvt]: I grew up in Columbus, OH, so we...

Wilderotter: Right, so Columbus was a good example of a QUBE system, one of the early systems in the United States for ITV.

[itvt]: At the time, did you think that QUBE was something really promising?

Wilderotter: Yeah, I think all of us in the industry saw the promise of ITV; but I do think that the hardware was clunky, and it was expensive, and the networks really weren't robust enough to do the things that would really drive revenue on that platform. However, if you look at any of those big QUBE metro systems that were used back in the 80's--in Columbus, Houston, Dallas and Cincinnati--the revenue per customer in every one of those markets, even today, is about 20 percent higher than the revenue in other cable systems. Because people got used to buying on-demand movies very early on. And that habit's been there for almost 20 years. So anyway, I was familiar with ITV, then I went to wireless. And after 2 years under the AT&T umbrella, I left to become CEO of Wink.

[itvt]: Did someone recruit you to work for them?

Wilderotter: Yes, I was recruited by Ramsey Beirne, which was a major recruiting company in the 90's. It's still around. It actually recruited Jim Barksdale to Netscape, and Jim was my boss at Macaw. So Jim told the Ramsey Beirne guy, when they were talking about this specific job, "Well, you've got to call Maggie Wilderotter, because she's got experience both in wireless and in cable." And at the time, the Wink technology worked on both cell phones and pagers, as well as set-top boxes.

[itvt]: In what way?

Wilderotter: Well, it could bring interactive services--just like WAP does today--on a cell phone. We were a competitor to the WAP format back in the mid-90's. But when I came into the company and looked at how nascent the wireless market was for data, I felt that data would not be a factor for at least 4 to 5 years, which was correct. And because we were a small startup, we really couldn't focus on both industries and do them both well. So we shifted our focus over to cable--or I should say multi-channel video--versus focusing on wireless.

[itvt]: Are you surprised wireless is coming back into the ITV realm?

Wilderotter: No, I'm not. I think that, just like anything, you have to get a maturity of networks in reliability and capabilities, and the price curve has to go down on the equipment for that to happen, for it to become economically viable. And I still think it's probably another 4 or 5 years away before it has any mass-market potential.

[itvt]: So did you become a believer in ITV when you came to Wink or before that?

Wilderotter: I was always a believer in ITV, but I was a skeptic in terms of timing, skeptical that the right network or system was in place in order to deliver it. At first, I didn't want to interview for the Wink job because, you know: "ITV, been there, done that, it doesn't work, right?" But then I came down and saw the technology capability that [Wink founder] Brian Dougherty had designed, which was very elegant in its simplicity--it wasn't rocket science, and it actually resided on current networks. And for under $2 a box you could deliver this capability. So it was the first economic model I had seen that really had viability to get mass-market deployed, and that's what got me excited about it. So I took the plunge, and it would have been 6 years in December since I joined Wink.

[itvt]: Does any specific incident stand out that really made you realize that Wink was on an upward swing? What convinced broadcasters, manufacturers and MSO's to take a risk with the company?

Wilderotter: Well, there's a whole host of factors--timing, skill, etc.--that go into how companies become successful. But I would say that one of the "Aha!s" for us, there are really 2: there was getting Charter Communications to agree to launch Wink everywhere. And I think, based on Paul Allen's vision of ITV and his ability to take risks differently than a traditional cable operator, it gave Wink some momentum, to have distribution in the United States. That, coupled with the DirecTV win for us, which showed the broadcast networks and advertisers how we could straddle the cable network and the satellite network to deliver audience for them. These wins solidified and reinforced the leadership that we had in delivering an end-to-end interactive service. So I would say those 2 wins were huge for us. And NBC, of course, was a very early partner of ours: actually they became a partner in 1996, and were always very supportive and believed in interactive services. So we had these kernels of major players that gave us credibility. And I think what we tried to do was to build on that momentum-wave in getting other cable operators and getting EchoStar and broadcast cable networks to jump on board.

[itvt]: Wink has always seemed like a steamroller to me: you guys seemed to move slowly and steadily, continuing to make deals despite the emergence of the middleware companies and other competitors. Quite a few people expected Wink to fall by the wayside, but you didn't. You moved very carefully. What was the strategy here?

Wilderotter: One part of it is that we decided to focus on the existing set-top boxes that were being deployed in the United States. Whereas the middleware companies were all waiting for the next generation because they couldn't really fit in these processing- and memory-constrained devices.

[itvt]: When did you make that decision?

Wilderotter: I made that decision back in 1997/1998. Because we were on the analog platform in 1997, we launched first on analog boxes: with Time Warner New York, with Time Warner Cincinnati, with Cox Palos Verdes, and with several Charter systems, such as St. Louis. So we started out on the Scientific-Atlanta and Motorola advanced analog platforms as our first boxes. And then, after the DCT1000's started to ship, and the DCT2000 came fairly quickly after that, I made a decision to say, "Look, I know this industry and there's no way a set-top box that costs 4 or 500 bucks can be justified in the home today. There's no way that's going to happen. So let's stick with what we know these guys are going to deploy, and stay focused on that, and not get pulled into the siren song of 'Oh, let's build for the next generation.'" Because, in the cable industry, sometimes the next generation is 10 years away, and as a small company we couldn't afford to do that. So that, coupled with the fact that I also recognized that technology is only one aspect of how companies are successful. It's about relationships. It's about trust. And it's about delivering on what you say you're going to do. And I have a very good reputation with customers for doing that over the years that I was in the industry. And people I work with trust me. So we kept our heads down. We said "no" to a lot of stuff, where most companies were placing bets everywhere. And we stayed focused on what our strategy was.

[itvt]: Can you say what you said "no" to?

Wilderotter: Absolutely. We didn't develop on the DCT5000, we didn't develop a middleware product, we didn't go after a guide solution, we didn't go after the browser or high-speed data world. We stayed focused on our niche of enhanced broadcasting: synchronized data with video, and virtual channel capability. Because that's what we were good at. That's what we do.

[itvt]: Yet people in the ITV industry would often say, "Oh, Wink is very simple. It can't do A,B,C &D." What gave you the confidence to continue to develop a robust, effective, simple solution? What gave you the confidence that broadcasters would buy into it?

Wilderotter: Consumers. Because we were deployed, and people were using the system like crazy. Because they weren't intimidated by it, it was easy for them to use. They couldn't get into trouble with it, it was TV-centric. It wasn't trying to put the Internet on television. Back in those days, that's all anybody was talking about. We did not get drawn into that. We stayed focused on what consumers did in their living rooms with television. And that was: sit back, lean back, and watch. And 1 or 2 button clicks, we felt, was all they were really willing to do in that type of environment. And from the early days, over a 5-year window, we still have around 80 percent of all households that have Wink use it an average of 10 times a week.

[itvt]: The Weather Channel has reported impressive figures.

Wilderotter: Yeah, millions and millions of transactions a week. And the same with ESPN and CNN. And I think we had a hugely compelling story that we could tell our partners. It was: "Look, this isn't rocket science, and we're not trying to revolutionize television. We're giving people a little bit more to do when they watch. And you know what? They'll do that." Will they do more than that? I don't know: it's a huge leap. It doesn't seem like they will. But we know that they'll do this.

[itvt]: Would you say that this simple, pragmatic approach was Wink's major contribution to the emergence of ITV?

Wilderotter: Absolutely. What we did is we developed the basic interactive system, the baseline service that everybody can use. And it's free, and it's simple, and it's easy. And it gets consumers a little more "leaned-in" than what they were used to. I think from that platform you can build more sophisticated services as the hardware and the networks get more robust. And there'll be niche groups of those baseline customers that will use those niche services differently. Whether it's video-on-demand, or it's email and chat on their television, or whatever other applications come down the pike. I do think that from this baseline group you will get niches that will use other products and services.

[itvt]: While we're on the topic of what's coming down the pike, could you talk a little bit about your relationship with OpenTV--or is it more with Liberty Broadband Interactive Television (LBIT)?

Wilderotter: Well, both. OpenTV has now purchased Wink. So they own Wink today. They bought it from LBIT. LBIT bought it first, and then they turned around and sold it to OpenTV. OpenTV has, I think, a very solid middleware product. And they have done an extremely good job of getting it deployed around the world. You know, their one deployment here in the United States, which is really a robust deployment, is EchoStar, where they're in millions of households. And EchoStar has chosen Wink also. So, over the last 10 months, we have been working very closely with OpenTV on getting Wink launched as an application riding on their middleware platform. So it's a very complementary relationship anyway. Plus, OpenTV doesn't have any of the backend transaction-processing capabilities. So they get to leverage that on the Wink network, which makes a whole lot of sense for what they want to do in the long run--which is deliver more robust applications on their middleware platform. I think it's a very good strategic fit for the 2 companies to come together. It allows OpenTV to take their 27 million households around the world and add Wink as an application. And it allows Wink, with our 7 million households in the United States, to evangelize that OpenTV's capability can work very well in conjunction with the application that we have.

[itvt]: You don't think that Wink interactivity competes with application development by OpenTV?

Wilderotter: Well, I think it does on some level. On the virtual channel level it does. But I think providing broadcasters and cable programming networks with one way to write applications that can work for both the Wink technology and the OpenTV technology will be huge for them. By bringing these companies together, we can provide an interface that you can use to develop an application, and that application will then run on either platform.

[itvt]: Why do you think Liberty decided to bring Wink and ACTV under the OpenTV umbrella rather than run them directly from LBIT?

Wilderotter: For 2 reasons. One reason is that when you buy 3 public companies, in order to really maximize the synergies of those companies, you have to put them together. Otherwise you wind up with a whole host of overhead, from running 3 separate companies. Secondly, I think the OpenTV shareholders, in seeing a Wink or an ACTV 100% owned by LBIT, up at the LBIT level, and OpenTV being a public company where the ownership is only in the 40-50% level, were worried about the transfer pricing that would go back and forth between the companies. I think in this day of Enron and WorldCom…you know, nobody wants to get into these related 3rd-party environments where you have these dollars flowing back and forth between companies. So I think cleaning all that up, by pulling these 3 companies together into one, eliminated all of those questions that would come up. Plus, OpenTV is a publicly traded vehicle that has upside in its stock and has capital-raising capacity because it is on the public market.

[itvt]: Can you talk a little about [LBIT CEO and OpenTV Chairman] Peter Boylan, and how he will move OpenTV forward? And could you also give us an idea of what your consulting role at OpenTV will be?

Wilderotter: Well, I think Pete is a very smart guy. He has been around a long time, between United Video and his Gemstar days, and he has a lot of experience in the ITV field. I think he knows the pitfalls of what happened at Gemstar and doesn't want to repeat those with the assets he's purchased recently. He knows he has to have partnership relationships with customers in order to get deployment. So I think he's going to try to be very smart about how he pulls these assets together and gets customers to use them. And I think he's going to try to befriend the customer base in order to do that. So I believe that he has the right strategy and he's a contrarian: he looks at the market, where ITV is sort of a distressed set of assets today, and he can pick them up almost for their cash value and provide the patience to wait until things turn around. So he's a patient investor from that perspective. Because Liberty is not driven by earnings. They're one of the few companies that don't worry about whether a transaction's accretive or not in the first 12 months, and that's very important with these type of assets. Now, for me, from a consulting perspective, I'm really going to be moving on and doing other things, but I truly believe in what these guys are doing, and if they have questions, or if there's something in particular I can help them with, I told them that I would be more than happy to do so, on a case-by-case basis.

[itvt]: Can you give some examples of the kinds of things you might consult on?

Wilderotter: Well, I've been working with [OpenTV CEO] James Ackerman on the integration plan for the companies. Another thing I'm interested in is the strategy of how you look at a new business model when you have multiple product sets. Where the different product sets have different business models today, like licensing versus transactions versus revenue-share. And how do you package that together so there's rationality to the customer base? That might be an example of something I might participate in.

[itvt]: You mentioned that you are "going to be doing other things." Will these things be ITV-related?

Wilderotter: They could. I don't really know yet. I'm exploring lots of different options in terms of what I would do next. Some of them are within the industry, but not necessarily ITV. You know, I will not--and this is just sort of my DNA--but I'm not going to go run a company that would compete with what OpenTV and LBIT are trying to accomplish. Not because I'm precluded from doing so, but because I spent 6 years building Wink. I really believe in those capabilities and I'm not looking to go do something that would try to hurt those assets. Because I believe in those assets. But that's not to say I wouldn't do something with the cable industry or media or entertainment or DBS. I have a lot of experience and relationships and knowledge about those businesses. But I'm also looking at other options: in technology, I mean. I've run technology companies for 15 years. So, just like I went from cable to wireless, there are new things out there that might be of interest that are different than what I've done in the past. I'm definitely thankful for the experience that I've had these last 5 1/2 years at Wink. It's taught me so much. I've learned and grown so much in that period of time, it's been amazing.

[itvt]: Do you have any observations about Liberate's move into "triple-play" [i.e. technologies that allow network operators to offer packages of video/voice/data services] and how that will affect the ITV industry? Do you think that Liberate will aggressively compete with OpenTV?

Wilderotter: Well, I've not really done a lot to study what Mitchell [Liberate chairman, Mitchell Kertzman] is trying to do with triple-play. I will say that the head-on collision between OpenTV and Liberate in the middleware wars is, of course, not healthy for either company. I think that Mitchell is trying to move into areas that are more complementary to what OpenTV is doing rather than competitive. And I think that's a good thing. Because I believe there's enough opportunity with ITV that you don't need multiple players all doing the same thing. But I still think it remains to be seen what the business model is, what the adoption will be for triple-play, and how MSO's and customers will use products and services.

[itvt]: About the ITV industry in general: what are the unanswered questions that need to be resolved, and what are the specific areas you think would be good for some more development?

Wilderotter: Well, I do think that everybody is still dabbling. There are very few companies in that whole business area that have jumped in with both feet and that are really taking some risks in pushing the envelope on what works and what doesn't work. And I mean that from the customer perspective. I think definitely LBIT and OpenTV are in with both feet, just like Liberate is and others that provide the capabilities. But the capabilities are only as good as what gets presented to the customer. And I think that until MSO's really embrace the capabilities--like DirecTV is embracing them--and until this is done more wholesale across the board, and the cable programming networks, instead of doing a little bit here and a little bit there, really start to look at interactivity as a strategy for keeping viewers and providing advertisers with competitive advantage…these are the kind of sparks that need to happen with several players. Just like in the beginning, when DirecTV, Charter, and NBC jumped on the bandwagon. We need that next jumping-on-the-bandwagon to take place, where certain people take some risks, and really start to change their models of how they present product to the customer.

[itvt]: Do you think that News Corp. might once again try to purchase DirecTV, and that, if that happens, we will see DirecTV embrace ITV to an even greater extent?

Wilderotter: Well, I think DirecTV embraces ITV better than anybody in the country today. I don't think anybody discounts that Rupert Murdoch would love to have DirecTV as an asset in his portfolio. I think he's always been interested in that asset; he's made no bones about it, and if it's going to be up for grabs again, I'm sure he's going to be waiting in line.

[itvt]: We've noticed recently that there's been an increase in the number of ITV content stories that we find ourselves covering. Deployments seem to be increasing. Are there any specific deployments that have been exciting for you?

Wilderotter: Well, I do think from the programming perspective, ESPN is aggressive. They believe in the space, they are investment-spending in the space because they know interactivity and sports go hand-in-hand. I do think that some of the networks are definitely jumping on the bandwagon: we are seeing more stuff happen from a content perspective. I also think that there's a lot more interest from advertisers that we're seeing over the last couple of months, because the advertising market on TV has come back. And there are now 7 million households for Wink, and when we launch with OpenTV on EchoStar, that will add another 4 to 5 million overnight. So by the first part of next year you're going to see Wink in 10 to 12 million households. That's a huge number for advertisers. It starts to get them excited about this one-on-one connection into the house. So I do think that things are happening. You know, when we hit that 5 million mark a couple months ago, it really got the advertisers to sit up and take notice.

[itvt]: In general, what do you think is the importance of ITV?

Wilderotter: I think it's an opportunity to provide new products and services, and generate new revenue streams, and build loyalties in existing customers, that aren't there today. I think that some of the things that have happened with the Internet, in terms of people being able to click and get instantaneous information at their fingertips, is something that consumers are now demanding out of devices in their home. And I think that interactivity can deliver a whole host of services to the household in a TV-centric way, that can provide value to the consumer which that consumer will in turn pay for.

[itvt]: Looking back, what would you say was your greatest contribution to the ITV industry?

Wilderotter: Well, I would say that we have built the number-one ITV service in America with 7 million households. No one thought that anybody was ever going to be able to do that. And we pulled together 250 different stakeholders--that's what it took in order to make that happen. I think we proved not only that we could do it and deliver a mass market, but that consumers really like the stuff and they use it, and they click on it.

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