ITV trivia games channel, Buzztime Entertainment, has been in the news recently, signing licensing deals with Digeo and with Media General-subsidiary, Boxerjam, and achieving carriage on a 3rd cable system (Susquehanna Communications' Williamsport, PA system. It is also carried on SusCom's York, PA system and on Time Warner Maine's Portland system). The company is a subsidiary of NTN Communications, which for the past 20 years or so has offered interactive trivia games in bars and restaurants throughout North America via its NTN Network. Buzztime's president and chief operating officer, Tyrone Lam, recently spoke to [itvt]'s Tracy Swedlow about the company's new licensing deals, about its efforts to build community around its service, about its plans for a significant expansion of its product offerings over the next 18-24 months, and more.

[itvt]: Could you tell us a little bit about your background, and about how you got into the games business and ITV?

Lam: I think it was fate. Back in 1992, I was living in Reston, Virginia. I had started my own company in 1990--we were in desktop publishing--and I had sold it off in early 1992. I wanted to get into something new and up-and-coming, and I heard about this company in Reston, called TV Answer, that I could literally ride my bike to. I don't know if you remember TV Answer: they became EON. I was one of their early hires: I was hired to develop their games and sports products. While I was there, I became good friends with Carlos Silva, because I was the product manager and Carlos was the development manager for these games and sports products. We worked side by side from 1992 to 1996, and I just totally loved it. Carlos and I were the first people to develop a live, play-along version of "Jeopardy!" in the US. I literally keyed in the alternative answers every night, and had a blast.

[itvt]: This was before the Mixed Signals version of "Jeopardy!"?

Lam: Oh yes. We launched the first live, play-along version of "Jeopardy!" in conjunction with WJLA-TV's broadcast--WJLA is the Washington, DC ABC affiliate--back in 1993. TV Answer was actually responsible for a lot of "firsts." As a result of what we were doing with sports, I came across this company, NTN Communications, in 1993, and we did a licensing deal with them in 1994 for "QB1," their live, play-along football game. Unfortunately, TV Answer was ahead of its time and technically could not get off the ground. In 1996, I was offered a job at DirecTV, to manage their ITV services. This was back in the early days, right before they launched. I began looking for a house in LA, but--no offense to people in LA--I decided there was no way I was going to live in that city. Dan Downs, the founder of NTN, however, knew that I was willing to move to California, and approached me about working for his company. I moved to Carlsbad, and went to work for NTN in 1996. First, I worked in the marketing department, and eventually I became general manager of the NTN Network. Then, in 1999, when we founded Buzztime, I went over to run that. So I have been in ITV for over 10 years.

[itvt]: Buzztime has until now focused on trivia games--presumably because of its NTN heritage. Do you plan to expand your offering beyond trivia games?

Lam: Yes. When we started Buzztime, we felt strongly that trivia was our space to lose: it would have been a tragedy if any other company had come out and beaten us to the punch with trivia, because we really are the kings of trivia. We have the largest trivia database for ITV, and we have the most sophisticated ITV technology to support our trivia games. I think we have been very successful building our business on trivia, but now that we have done that--created our niche with trivia--we want to leverage all of this sophisticated technology for multiplayer games. As you can guess from our deal with Boxerjam, which gives us 22 new games, Buzztime is going to mean a lot more than trivia over the next year or so. We just started out with trivia.

[itvt]: How are the cable operators responding to your plans to expand Buzztime beyond trivia games?

Lam: Positively. I am currently on the East Coast in the middle of a road trip, where we're meeting with as many MSO's as we can, just talking to them about our product roadmap and about how we are expanding beyond trivia. I think we have done this in the right order: we have never over-promised with the MSO's. We told them: "This is what we are doing: we are going to launch trivia, and we are going to make a great trivia product, and it is going to be a basic trivia service, and it is going to be built on such-and-such a technology," and so on. Now that we have done it, we can say: "OK, now for Phase 2. We have announced that we are launching 22 games for ITV, we're expanding greatly into the non-trivia market, and we have also developed stand-alone games for Wink." The reaction has been fantastic; the operators basically told us that, far from over-promising, we have been taking nice, progressive steps.

[itvt]: Have the operators been pushing you to expand beyond trivia? What are they asking from you?

Lam: You know, they are not asking for a lot. I'm not trying to be coy about it. I think we are providing these guys with a really clear game plan. We are the experts and they recognize that, so they are not saying, "Here is our 10-step process for gaming." It is more like: "OK, Buzztime, you got an hour of our time. What have you got?" Then, 3 hours later, they are saying: "Holy smokes! You are thinking of things we never thought of. We love it!"

[itvt]: You mentioned the licensing partnership you just announced with Media General's Boxerjam games portal. Could you tell us a little about how that partnership came about?

Lam: The 2 companies--Boxerjam and NTN--have always been on friendly terms: Boxerjam launched their game shows on AOL in 1993, the same year that NTN launched its games on AOL. We tried to do some projects together, because we felt our content was complementary. Later, Boxerjam fell on hard times after the dot-com bubble burst, and as a result the company was sold to Media General. Having followed Boxerjam over the years, and knowing the owners very well, I approached them about a year ago about securing the exclusive ITV rights to their games.

[itvt]: What made you think that their games, which they offer on the Internet, would be appropriate for interactive TV?

Lam: Well, one of the founders of Boxerjam was Merv Griffin's wife, Julann, who is the co-creator of "Jeopardy!" and "Wheel of Fortune," and, if you look at Boxerjam's games, you'll see they were created for ITV. However, because ITV didn't take off in the 90's, they decided to put their games on the Internet. So it is pretty much the same story as with NTN: NTN's content was created for interactive TV, but because ITV was slow to get adopted, we turned our attention to restaurants and bars, the Internet and other distribution methods. Anyway, we found that the Boxerjam games were very easy to adapt to TV: they work well with a remote control, and look very nice at TV resolution. Another reason why I wanted to license Boxerjam's games, other than that they are formatted and optimized for TV, is that Boxerjam.com is moving towards a premium Web site model. I didn't want to license content that was going to be free on the Internet: I wanted content that had a value associated with it, so that when I go to do a licensing agreement with a cable operator, they see a premium value for their digital subs, something that you can't just pick up free on the Internet.

[itvt]: Could you talk a little about how the Boxerjam games will fit into Buzztime's business model?

Lam: For the short term, the Buzztime model is still about simply getting distribution and finding a license fee model that's not burdensome to the cable operators. The idea is that the cable operators will pay some pennies per subscriber per month to distribute the basic Buzztime service to their digital subs. Then, over the next 12 to 18 months, you will see the introduction of a premium tier of services from Buzztime that will include some of these Boxerjam games, as well as other content that we are building and licensing from other companies. This premium tier will be more geared towards leagues, tournaments and other community services that you would expect more avid gamers to see value in. It will be some combination of a subscription service and an event-driven, pay-to-play service, and we will share the revenues with our licensing partners, as well as with the cable operators, of course.

[itvt]: Do you think that US cable operators are ready to start deploying premium, pay-per-play gaming services?

Lam: Pretty much all the partners we are dealing with are of the mindset that they would offer a premium service if they felt it would provide an opportunity to create more revenue from their digital customers. We at Buzztime, meanwhile, have technologies that are either being developed or are already built, which allow us to offer premium games. In fact, the only thing that has held us up from offering a premium game service is not the technology nor any lack of a business model: it is the fact that we want critical mass before we start spending all this money on developing and marketing this wide array of services. We want to make sure we have distribution in millions of homes before we actually introduce premium services, because then you have the economies of scale, of product development and marketing, that go along with having that size of audience to market to.

[itvt]: How do you think you will achieve distribution of your games in millions of homes?

Lam: Well, one advantage we have is that we are offering operators applications that work on today's set-top boxes. We offer something real: people are actually playing our games, and operators are paying us money to distribute our content to their customers. We now have over 50,000 live, 2-way game subscribers on 3 different cable systems, and there is nobody else who can say that. We have inter-connected all 3 of those cable systems--even though those systems are owned by 2 different MSO's--so that their subscribers are now all playing against each other. Who else has done that?

[itvt]: Are you seeing any kind of culture shift on the part of the operators that would lead you to believe that your chances of significantly increasing the distribution of your games are good?

Lam: Yes, the top MSO's that we are dealing with have really hit their stride when it comes to VOD, PVR, HD and other services. These technologies have now moved out of the lab and into the field, and as a result, the operators are getting time to start thinking about the other interactive applications that are out there. Another thing that serves us well is that we are already deployed: this means that the operators are not scared that we are going to break their system. We are operating on the networks of Time Warner Maine, which also has HD and PVR, and which is even launching Telephony, and we work fine in that environment. Once you take their fears about your technology out of the equation, you get the operators moving a lot faster.

[itvt]: You mentioned that you are now supporting multiplayer gaming between subscribers on 3 systems, owned by 2 different cable operators. How does that work?

Lam: It is based on our core play-along game technology that has evolved over the past 15 years of NTN and Buzztime. Over the past 2 to 3 years, we have customized it for today's cable set-top boxes: basically, we have a small game server at each of the headends, and the applications that the players are playing on these systems are all in synch, so that, whether you're in Portland Maine or York, Pennsylvania, you are actually seeing the exact same questions at the exact same time, and you have the same amount of time to respond to them. At the end of each question--which is about every minute--you get ranked within your own cable system. However, at the end of the game--which is every quarter of an hour--we call all of the scores from the various cable headends back to our co-located facility at Pacific Bell in California and, of course, to our studio in Carlsbad, and we rank all those scores together and send them back out in real time to the cable systems. So if you are, say, a kid playing a kids' trivia game in York, Pennsylvania, you're getting ranked locally on a minute-by-minute basis, and getting ranked every 15 minutes against other kids in Williamsport, Pennsylvania and Portland, Maine.

[itvt]: Could you talk a little more about Buzztime's roadmap for the next few months?

Lam: Well, right now all of the systems we are deployed on are Scientific-Atlanta-based, so I think you can expect in the near future see us also deploying on Motorola systems. Of course, as far as the end-user is concerned, the Motorola version of our system will look like the S-A version. You can also expect to see us expanding the Buzztime channel to include some simple, classic games--card and board games, for example--that will be incorporated in the basic service. I think you can also anticipate us making some formal announcements in the next 12 to 18 months about our premium service offering, which, as I mentioned, will include much more robust games, as well as tournaments, leagues, and high-level competitions.

[itvt]: Could you tell us a little more about these tournaments you're planning?

Lam: It is very similar to what we have been doing on the NTN Network in restaurants and sports bars across North America, where we set up competitions by state or by time zone, or even internationally. We have done local tournaments on the York, Pennsylvania system, and what we want to do now that we are deploying in Williamsport, which is about a 2 1/2-hour drive from York, is hold competitions between the 2 systems--but then hold the finals at an NTN Network restaurant, like TGIFriday's or Damon's, in both of those cities. The finals would include the top players, and you could bring in media and sponsors.

This is the kind of stuff that is getting the cable companies' marketing departments all excited: we reach 6 million people every month via the NTN Network in the US and there are 4 TV's on average at every one of these establishments. We have gamers in the home and out of the home--nobody else has that. So we can take our in-home cable gamers and give them 15 minutes of fame, by bringing them into a public establishment like TGIFriday's or Damon's, where they can be in front of the people they are playing with, and see their faces. And, of course, we'll have the TV news there, saying "SusCom has sponsored a contest for Pennsylvania's smartest person at trivia: let's break to that location right now!" What we are able to do, thanks to our NTN network, is create a local gaming community and add personality to it.

[itvt]: You have been successful establishing your company, your brand, and the technological underpinnings of your network, and now you seem to having some initial success securing carriage with cable operators. Why do you think Buzztime has been relatively successful, while some other games providers are either having trouble securing carriage in the US, or seem to be ignoring the American market altogether?

Lam: One thing I find interesting is that the 2 gaming companies which have had success in the UK have had little or no success in the US, and seem to have almost given up. Frankly, I have a couple of theories about why we have been successful: one is that I do believe we are a very easy company to do business with. We don't go in there telling the operators how to run their business. We take the approach of trying to be a partner, and so we figure out a way to create revenue to share, as opposed to saying, "You have got to fund this thing." The other thing is that, from a technology standpoint, we are still way ahead of the competition in terms of being able to deploy our application. Almost 2 years ago, we announced our partnership with Scientific-Atlanta, and that got us to where we are today with the Scientific-Atlanta version of our service. Then, a little over a year ago, we announced our premiere partnership with Liberate, so you can anticipate we are moving forward on a Motorola solution. I think our success is due to a combination of having a talented, focused team, which has been doing this for a long time on multiple platforms, and having really great partners, who can help us bring this to market.

[itvt]: Do you expect the US ITV gaming industry to reach critical mass in the near future. If so, do you see yourselves working with other games companies, once your network is more established?

Lam: I feel confident that Buzztime is going to be in millions of homes in 2 to 3 years. As far as other gaming companies are concerned, I do see some of them getting some traction, if for no other reason than that some MSO's may not want to put all their eggs in one basket. It is our intent for Buzztime to not only be a programming offering, but to be a gaming technology platform. We have also expressed a desire to host 3rd-party games. So, as we deploy our play-along gaming platform, which supports registrations, advertising, promotions and competitions, on cable systems, we are open to having competitive games companies put their games on top of our platform. We're interested, in essence, in being a games aggregator.

[itvt]: Are you also seeking submissions from independent developers?

Lam: Now you're talking! Our objective is to offer a set of tools--almost an SDK, if you like--that we can make available to aspiring games companies, and tell them, "Hey guys, have at it!" The cable operators will decide what games go on their system, of course, but if we can be the enabling mechanism that allows smaller games companies to get on the cable platform, we'd be very happy and the subscriber would be better for it.

[itvt]: When will you begin offering these tools?

Lam: I don't think it will be too long. They are part of our 18 to 24-month plan, under which we are developing the play-along game technology that will allow us to offer premium events and also support more sophisticated advertising and promotions. The whole key here is that the cable operators are not going to want to have 5 different registration processes for their game customers: they want to have just one. They want to have one way to set up competitions and tournaments, and they want to have one method for fulfilling the prizes that would go out to the winners. So there is going to have to be a common game interface, and the question is, "Who creates that?" Our egos are not so out of whack that we want to take control of that. We basically will go to the cable operator and say, "OK, here are the tools. If we can work out a deal together, we are happy to share this technology with you and with our competitors, so that we can kick-start this game opportunity."

[itvt]: How important is the Buzztime brand to your deployment strategy?

Lam: There is a real desire to ensure that the Buzztime brand is prominent in all our deployments. Of course, there's no question that the operator is going to want to have their brand there as well--and that's not an issue for us. If we were a company other than Buzztime, I think it would be somewhat of a hard sell to persuade the cable operator that our offering has to have the Buzztime brand on it. However, we are helped by the fact that the Buzztime brand reaches 6 million unique customers every single month in all these bars and restaurants. And we have research that shows that you are almost twice as likely to have digital cable if you are an NTN player in a bar or restaurant than if you are not an NTN player. So I can bring the operators hard data that demonstrates that putting the Buzztime brand on their systems will actually bring them customers. They love that.

[itvt]: How do you arrive at this 6 million figure?

Lam: The NTN network is in over 3,000 restaurants and bars in the US, and we have audits that show that, as a result, 6 million people a month are exposed to it: there is an average of 4 TV's in each of those bars and restaurants, and they are on 15 hours a day.

[itvt]: You recently announced that you had licensed some games to Digeo, which they will use on their i-Games channel. When will those games be rolled out, and will the Buzztime brand be featured on Digeo's service?

Lam: The first of the 3 games that we are licensing to Digeo will be launched in the next couple of months, and, yes, they will carry the Buzztime brand with them.

[itvt]: Will they be separate from the rest of the i-Games channel?

Lam: The 3 games that we are providing will be included on the same list as the other games that Digeo offers.

[itvt]: Do you have plans to offer your games on the Internet?

Lam: One question we are focusing on is: how do we leverage the multiple types of services that today's cable operators offer? As a result, you are going to see us offering a lot of complementary services on the walled gardens cable operators provide for their cable modem customers. So, if you are a cable broadband customer, you will get a greater set of features from Buzztime. The operators like this, obviously, because it gives their customers one more reason to order their cable modem service. This is why we don't have a games portal site: if you go to Buzztime.com, it is not a Web site for games. We are not in the business of competing with the operators: we are not saying, "Hey, license our content, and help us drive a business, so that your customers can go around you and come to us directly." We partner with the operators to create value and drive more revenue from their subscribers--and we make sure we don't go around them.

[itvt]: Will you always market your ITV and your IP broadband offerings to cable operators as a package, or do you also plan to market them separately?

Lam: Our plan is to keep the TV and the cable set-top box as the focal point for distributing our games. We will use our IP broadband offerings as a way to enhance the value of the games on TV.

[itvt]: You are also involved in mobile-phone gaming, correct?

Lam: We launched Buzztime games on Sprint PCS over 2 years ago. Buzztime is the #1 listing in their games portal, and we have been one of the most used 2-way games services on mobile phones for the last couple of years. It is a side business for us, but we watch it very closely. I think it will grow over the next 12 months. If we can find another way of adding value to cable MSO's by offering games on telephones, we will do it. We have a goal for an event called "The Big Show": lets say, it's 8:00 PM, Friday night. If you have digital cable TV, if you are at an NTN bar or restaurant, or if you have a cell phone, you can participate in "The Big Show." We want to cross-pollinate all these platforms to create a massively interactive experience.

[itvt]: Which ITV platforms do you have at home?

Lam: I have digital cable from Cox, and I have EchoStar with their PVR. I also have a PlayStation 2. If you asked me what ITV services I have access to, well, we have everything you can think of in our offices, and that is where we spend most of our time anyway. We have a little virtual living room set up there, and we can access everything under the sun.

***



Copyright 1998 - 2004 [itvt] | Swedlow. All rights reserved