INTERACTIVE TV TODAY - Features - Interview with Rick Mandler of ABC's Enhanced TV Division

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Feature: [itvt] Interview with Rick Mandler of Disney/ABC Enhanced TV

Rick Mandler heads up the Walt Disney Internet Group's Enhanced TV division, which has just developed single- and 2-screen applications to accompany some very high-profile ABC TV programming: its recent broadcasts of the various "Bowl" college football championship games and its upcoming broadcast of the American Music Awards (see article in this issue). Before the Christmas break, Mandler spoke to [itvt]'s Tracy Swedlow about Disney/ABC's ITV strategy in general, about why ITV is important to the ABC TV network, about how the decision is made to add interactivity to a show, about the factors that drive usage of ITV apps, and more.

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

Mandler: I've been first at ABC then Disney for 11 years, but I started out as a lawyer. I studied social psychology at college, and somehow migrated to law. I worked in DC for a few years doing nothing special, went to law school, clerked for a judge, and worked for a law firm.

[itvt]: So how did you get to Disney?

Mandler: I was working at the law firm, and a small libel case involving the TV show, "20/20," came across my desk. 20/20 had done a piece about people who either faked or exaggerated injuries when they claimed to be hurt, for example on the subway or bus. There was a guy in the piece who felt that 20/20 had not done right by him. He had a permanent limp, or so he claimed. When he walked up and down the street for the cameras, to my eye it looked like he wasn't limping. So I prepared a motion to dismiss and basically said, "Hey judge, take a look at this: he is not limping. Make the case go away." Before it even got to that, though, they settled with us and the case went away. ABC thought that was great and they hired me. I have to say that anybody could have done it: there was nothing particularly unique about it.

[itvt]: How did you get involved in interactive television?

Mandler: I was always a bit of a geek. Even when I was a lawyer at ABC News, working for 20/20, Prime Time Live and other ABC news shows, I was always the guy who figured out how to use the office computer system first, and the guy who started emailing. So I was always really interested in this stuff. At some point, I worked with some of the guys at ABC Radio, and--kind of on spec, because I was really interested in interactive stuff--I put together a business plan for ABC Radio, for an ABC Radio Internet business. They liked it and they hired me. So I did interactive work--mostly Internet interactive work--with ABC Radio for a couple of years. The guy who ran ABC Radio at the time moved up to what was then called "ABC Broadcasting" (he had the ABC TV stations under his domain as well), and he took me with him. So I was doing Internet things with the ABC TV stations too, and Disney has this whole strategy of folding up all its Internet assets into one company called Go.com. I got rolled up into that, and one day they knocked on my door and said: "Oh, we'd like you to come help add enhanced TV." So that's how I ended up there.

[itvt]: How did they even know they wanted to do interactive television? Where did that idea come from?

Mandler: I guess it all started with Walt Disney Imagineering Research and Development. WDI is sort of the in-house engineering team, and R&D at the time was really forward-looking about the future of television. R&D, in a partnership with ABC, started the Enhanced TV group, always with an eye to capturing what we all consider to be the significant value proposition of interactive TV. The feeling is you have got to be in to win. We started our group in 1998. We have been doing a lot of stuff ever since.

[itvt]: So you are basically in charge of Disney's ITV strategy?

Mandler: Yes.

[itvt]: How did you make the decision to focus on 2-screen ITV applications?

Mandler: We focused on 2-screen by default. Our earliest efforts were actually with Web TV and Web TV Plus. It was a frustrating platform to develop for, and it was clearly not gaining traction. We were really hoping for the 5000-class set-top boxes to roll out, and for there to be some standards adopted among the operators. In the interim, we took on 2- screen as a way to learn what works for the audience, and to try and figure things out a little bit in anticipation of single-screen just being around the corner. With single-screen not just being around the corner, we've sort of grown with the 2-screen.

[itvt]: I see that you have launched 2-screen apps for numerous shows- most notably, Monday Night and Sunday Night Football. Are you happy with the results of your 2-screen strategy? Do you think you will move more into single-screen app development?

Mandler: Yes and yes. I think if you and I had had this conversation a year ago, I would have said to you, "I think 2-screen is ultimately an interim technology and that everything will move into single-screen." I don't think that anymore. It seems like there are a lot of people who are very comfortable multitasking, who have TV's and PC's in the same room. With wireless networking and home networks and tablet PC's, it seems like there is an ongoing and persistent role for 2-screen interactive television. But yes, absolutely I think single-screen is going to be a big part of our future. It's got to be: it's just an easier user experience to be able to pick up the remote control and look at one screen and do the interaction.

[itvt]: How far away are you from launching a single-screen app?

Mandler: We've launched a couple already. Well, maybe I am overstating the case. We've got a bunch of single-screen stuff for advertising in ABC television network programming using Wink technology. We have 2 things in development: one is a Wink application for the "Bowl" College Championship series. Ford will be sponsoring that. The other is a Wink application for the American Music Awards. That will be sponsored by Coke.

[itvt]: When will those apps debut?

Mandler: Early in the new year.

[itvt]: What will they consist of?

Mandler: Well, I'm not sure: a lot of it depends on how well the early development goes. We started a couple of weeks ago. The big push for us right now is to see if we could get live stats--statistical information--directly from a broadcast truck into a Wink application, so that a user can call up and get rapidly refreshing game data on their TV screen.

[itvt]: And Ford is sponsoring that app?

Mandler: Yes, Ford will be sponsoring the Bowl app. Actually, the way we structure it--and it is how we plan on selling everything in the future--is we are going to try and build integrated marketing packages where we can sell 2-screen and Wink-enabled single-screen to an advertiser, and even advertising opportunities on other platforms such as the Web, PDA's or cell phones. We want to build a 360-degree approach to the brand message and to what the advertiser is trying to do.

[itvt]: Could you tell us a little about the American Music Awards app? Will it allow viewers to predict the winner?

Mandler: I don't know if we'll let viewers predict the winner or not. With 2-screen, that is an easy thing to do. With single-screen, because a lot of the distribution for Wink is DBS, you don't really have access to a return path. You do, but it's a challenge. So we are doodling out what the content palette for the one-screen app is going to be.

[itvt]: Speaking of DBS, how do you think the future of DBS in the US could affect what you'll be doing down the road? For example, if News Corp. acquires DirecTV and implements some of the things Sky does in the UK: multi-screens, etc.?

Mandler: To me the big win would be if both DBS players in the US--even if they don't merge--adopted the same middleware standard. It seems to me that it is a possible scenario, given the way the stars seem to be aligning themselves. That would be great, because you would have real critical mass at the development end.

[itvt]: Presumably you are talking about Open TV.

Mandler: Yes.

[itvt]: Presumably Wink will be integrated with that middleware.

Mandler: They are part of the same company, so I can only assume Wink will be integrated into the OpenTV product.

[itvt]: How important is interactive television to ABC overall? How high on the scale of priorities are these new applications?

Mandler: It is very high and very low at the same time. It is very high because management at ABC very keenly recognizes the huge potential of interactive television. We look at the television advertising business, which is roughly a $50 to $60 billion business, depending on who you talk to. Then we look at the money that is spent on direct marketing, which television gets almost none of--just a small share--and which is around $200 billion plus, and we say, "OK, how can we get some of that?" The answer is that we have got to be able to provide products that are appealing to direct marketers: and, obviously, making your products responsive is a first step in that direction. Interactivity, from the strategic perspective, is a chance to move a couple of share points of that $200 billion into the TV business. If ABC can be perceived as the leader and the driver of that transition, then our hope is that we can get a little more than our proportionate share of those dollars. That's the big upside, and everybody in senior management recognizes that and is on board with that vision. On the other hand, right now we generate very modest dollars compared to the millions of dollars in revenue that the ABC television network generated this year. So when you try and allocate your time--and this goes for just about everybody at ABC apart from my group--it's understandable that they prioritize the multi-million dollar deals ahead of the multi-thousand dollar deals that we are doing.

[itvt]: How is your growth? Are more people registering to use your applications and to advertise on them, and are your advertisers returning?

Mandler: This year versus last year, advertising is up significantly. Last year was just a bad year for advertising overall, so that is not surprising. As for our usage, it's interesting: our usage really tracks the on-air exposure that we get. The more on-air integration we get, the more viewers play along with 2-screen.

[itvt]: Do you see spikes?

Mandler: Yes, you see spikes. So, for example, on Sunday Night Football there is a replay challenge, and we encourage people who are playing along with ITV to vote on whether to overturn the play. We get an immediate spike in usership for that.

[itvt]: Are usage figures for your Sunday Night and Monday Night football apps roughly similar overall?

Mandler: They are very different: on Sunday nights, we are running a program for Mazda, which is the sponsor for all Sunday Night Football ITV. They have some very definite goals in terms of collecting leads, so we require people who want to play along with Sunday Night Football to register first, before they get to do anything. And there is always a certain percentage of people who won't--that's just the nature of humanity. So it's an interesting question for Mazda. By having folks register, it's much easier to get good data about who they are and try to get them to opt into permission marketing. On the other hand, because you have fewer people who are playing the game and playing along, the reach of the branding exposure is diminished. So it is an interesting trade-off. Mazda says they'd rather have the names, they'd rather have the permission-marketing value, even if it comes at the expense of the branding value. Now for Monday Night Football, you don't require any registration: you can just come in (though, if you want to see your name on the leaderboard, then obviously you have to register). So for Monday Night Football the audience is significantly larger at this point than for Sunday Night Football. Though in years past, it's actually been about the same, or Sunday has even been a little higher because of the replay challenge on Sunday.

[itvt]: Which works better for ABC's overall strategy--a strict or a loose approach to registration?

Mandler: A happy advertiser is what works best for ABC's strategy. We are at the stage right now where we are trying to learn what works for our marketing partners. So if this is the judgment that they are coming up with, we are comfortable with that.

[itvt]: How important would you say is the Enhanced TV brand itself [note: a yellow "ETV" logo appears on screen during Disney/ABC ITV programming]? How important is that branding to your advertisers?

Mandler: That is a really good question, and I am not sure as to the answer. I think that sticking with "Enhanced TV" and giving it a lot of on-air presence has made us more visible in the marketplace, so that people who do want to do interactive television know who we are and how to get in touch with us. On the other hand, ultimately I really do feel that our job is to�we are sort of like the American Cancer Society: our job is to put ourselves out of business. Our job is to advance interactive television at ABC so far that it just becomes part of TV--so that you don't need a special interactive TV group attacking it, so that it is just part of the regular course of business. So, if that is our ultimate goal, then a persistent brand isn't necessarily as valuable as you might think.

[itvt]: Would you say that your viewers--the ones who participate in ITV--are tech-savvy, early-adopter types?

Mandler: I think there is clearly an awareness amongst our users that this is just one of many ways they may ultimately be interacting with their television. The interesting thing about our demographics, though, is that they tend to track the show. So that our ITV audience for football looks a lot like the TV audience for football. And our ITV audience for the Oscars looks nothing like the ITV audience for football, but looks a lot like--almost identical to--the TV audience for the Oscars. So my take-away from that is that these are motivated TV viewers, who want more of a particular TV show, rather than early adopters per se of a technology. I think that motivated viewers, if there are ways to get more of a show--for example, through single-screen ITV--will find those ways.

[itvt]: And are advertisers attracted to motivated viewers?

Mandler: Yes, for a couple of reasons. One, like we said before, is that it gives you a chance to interact with them, so you can learn more about them and do all kinds of permission marketing. Secondly, I think advertisers recognize that with motivation comes focus and recall of a brand message, so that you can really drive your message home. Especially over the long duration that viewers are interacting. We get interactions that typically last an average of about 40 minutes: that is a long time, and gives advertisers lots of opportunities to send their brand message, lots of opportunities to penetrate. In today's world, where there are marketing messages bombarding us constantly, having someone's attention focused for 40 minutes is a real unusual thing and very valuable.

[itvt]: How does ITV affect viewership of ABC's shows?

Mandler: Typically, people who are interacting--as opposed to folks who are just watching--spend more time viewing. You get a longer viewing timespan.

[itvt]: Are audiences starting to request interactivity at all?

Mandler: A little bit. I think it would be inaccurate for me to say there is a groundswell of demand for interactivity, but we do get emails and requests. We occasionally poll folks, asking what else they would like to see, what kinds of sporting events they'd like us to make interactive. Mostly though, we try to pick the shows that we think lend themselves to interactivity. A sitcom is not a great opportunity for an interactive application. A sporting event or a reality show is. So that's basically how we make our judgments.

[itvt]: How do you decide which content you are going to make interactive? Do you say, "This year, we are going to have 5 shows that are going to be made interactive," and then select them? Do you have a set number of shows that you try to make interactive each year?

Mandler: We don't. We try to stay abreast of ABC's development schedule, and ultimately the decision to make a show interactive is driven by 2 things. First, it has to be a good idea: it has to be a compelling content application, or what's the point? So, like I said, the reality shows and sporting events clearly do lend themselves to interactivity. If we can come up with what we think is a compelling content application, then the second thing that drives the decision to make a show interactive is whether it is the kind of show and the kind of application that is going to be appealing to a sponsor. Because, at the end of the day, if I have something that is great for users but provides little or no value to the sponsors, then that is not good for the company. We're not a charity.

[itvt]: Then, presumably, one of the best measures of the success of ITV programming is whether it attracts repeat advertisers?

Mandler: Exactly. Mazda, for example, advertised with us before and is now the exclusive sponsor for the full Sunday Night Football season. And Coke, which advertised on our ITV-enabled version of "Who Wants to be a Millionaire," will be sponsoring the American Music Awards.

For more info, go to http://heavy.etv.go.com/etvHome/abc/about.shtml