Ed Forman, Mark Jeffery, ICTV

Ed Forman and Mark Jeffery are respectively EVP/COO and senior director of product marketing at ICTV, a company that has developed a technology infrastructure for delivering interactive Web media experiences to the set-top box. They recently spoke to [itvt]'s Tracy Swedlow about the business model behind the company's ActiveVideo Distribution Network; about why the company now sees itself as a media company, rather than as a technology vendor to the cable industry; about how ActiveVideo can enable social-networking services on TV; about content services that are using ActiveVideo (its clients include Fox, CNN, HSN, AccuWeather and Reuters); about the reasons behind the company's recent move from Los Gatos to San Jose; and much more.

[itvt]: ICTV has undergone some changes over the past year-and-a-half or so, correct?

Forman: Yes. It's become much more of a media company, and much less of a supplier of technology to the cable industry. This is a strategic change that's been underway for more than a year, and it's really an exciting time for us. We are now running a content-distribution business that takes video and other content from the Web and makes it available on television. Of course, all this is based on some rather breakthrough technologies that we've developed and that we install within television distribution infrastructures, in order to make all this work. But we're really now about media--about programming--as opposed to being just about technologies that live in cable networks.

[itvt]: For any of our readers who are unfamiliar with ICTV's ActiveVideo platform, could you give us a brief overview of what the technology is and what it does? [Note: for an in-depth overview of some of the technologies behind ActiveVideo, see [itvt]'s earlier interview with Forman in Issue 6.60.

Forman: First, I think it's important to talk about ActiveVideo more in the context of the viewer experience than the technological underpinnings. We have technology that transcodes Web content to MPEG and composites personalized streams in real time; but what we're really offering is a video experience that combines the choice, control and interactive advertising models of broadband with the quality, responsiveness and remote-control navigation that viewers expect from TV.

I think a good analogy to the distinction would be Google. Everybody understands that there is sophisticated proprietary technology behind the Google curtain, but they tend to think of Google in terms of user benefits. We've created a content delivery network that leverages our expertise in Web-to-MPEG transcoding and processing within the compressed digital domain, but in the end what's important is that ActiveVideo enables remote control interaction by television viewers with personalized, Web-driven video channels.

[itvt]: What is the business model for ActiveVideo?

Forman: Our business model is actually quite similar to that of an Akamai or any content delivery network. We build and maintain the enabling infrastructure for ActiveVideo entirely at our expense, and at no cost to cable or IPTV service providers or programmers. Service providers and programmers enter into carriage agreements, just as they do today for linear channels. We make our money by charging programmers a small usage fee that is based entirely on the amount of content flowing through our network. The more people engage with ActiveVideo, the more revenue we generate. It's the ultimate success-based model for service providers and our programmer customers.

[itvt]: You recently announced that your ActiveVideo platform now supports social-networking functionality, and you demo'd this at TelcoTV, correct?

Forman: Yes, though it's not the case that, in order to make social- networking features work, we had to add a whole bunch of new capabilities or significantly alter anything. It's simply a matter of realizing the potential of what we have here: basically, we have a Web services-connected platform that creates television. Once you have something like that, suddenly you realize that all the systems, mechanisms and content you have available on the Internet can be delivered as television.

Jeffery: When we were reviewing the features and benefits of our platform, and considering the various ways in which that platform could deliver interactivity on television, we asked ourselves where would we really be able to make a difference. And the answer to that question was that what differentiates us is our ability to handle real-time data, whether that be email, SMS, access to online classified databases, real-time polling or whatever--so things that you can't do with the infrastructures that are already in place. And this real-time data capability was what was at the core of our TelcoTV demo.

[itvt]: Could you explain exactly what you demo'd at the show?

Jeffery: You may remember the on-screen tickers we've demo'd in the past, that would pick up feeds from Reuters and the AP. Well, in this case, we leveraged the real-time nature of ActiveVideo and a few third-party technologies, in order to send real-time communications to those tickers. For example, I could use my Blackberry to send an email to telcotv@ictv.com. I'd actually be sending that to an exchange server at ICTV, which would automatically forward it to a third-party Web site that would automatically take the subject line from the email and turn it into an RSS feed. Meanwhile, the code in our ActiveVideo programming was looking for that RSS feed, and so, within seconds, that email subject line had gone across the country, back, and showed up on the TV screen.

[itvt]: And this is a capability that's commercially available on your ActiveVideo platform today?

Forman: Yes. It's available now for any programmer to take advantage of. As I was just saying, at the platform level, at least, there's really been nothing fundamental that we've had to change. I think this new capability really shows that we have something here that can enable and support innovation at the speed of the Web. All these new possibilities that we showed with this demo could be realized by someone who has a little page layout and JavaScript skill, and a little knowledge about how to access RSS feeds.

[itvt]: In addition to sending emails and SMS messages to the TV screen, what other kinds of capabilities are you starting to implement that take advantage of ActiveVideo's support for real-time data?

Jeffery: Well, it can support pretty much any interactive functionality that's accessible via the Web. Other real-time applications that it could support include classifieds--so that, for example, you'd be able to update the price of a car you had for sale; polling; auctions; and so on. You could bring all those types of things to the TV. And whether the real-time functionality that's implemented is part of the programming, or appears separately on a ticker, just depends on the programmer.

Forman: It's almost the case that the only real limitation is the programmer's imagination. If, for example, a programmer wanted to allow you to check on the status of your eBay auctions--well, I'd bet you anything that there's already an RSS feed out there that you could use that shows you the current price on all the eBay auctions you're following. We're basically leveraging the same building blocks out of which the Web is constructed.

[itvt]: Presumably, you could have services where viewers could customize a channel by selecting from multiple RSS feeds...

Forman: Yes. One way that would be implemented would be that the operator would offer a portal that provided a list of RSS feeds that you could then use to personalize your experience of that portal or of the various ActiveVideo channels on the operator's platform. Then, what the programmers or content providers wanted to do with their RSS feeds would be virtually unlimited--subject, of course, to what the operator wanted to allow on its platform.

[itvt]: Are any of your customers currently using your platform to build interesting RSS-focused services?

Forman: There's a lot of stuff going on that's not yet public. Though, of course, most of our customers utilize RSS feeds in their applications, as that's the basic content-management paradigm that they employ. With ActiveVideo, the availability of Web content on television that a viewer can access with their remote control begins with an RSS feed. If you take, for example, the line-up of stories that you see on the screen on CNN's ActiveVideo service, that's determined by the CNN RSS feed that runs CNN.com and other places CNN programming is distributed. RSS has become the primary mechanism through which content publishers connect their content-management system with all the various platforms on which their content is viewed.

[itvt]: Do you have any plans to extend the ActiveVideo platform to the mobile environment?

Forman: That's possible, but that's really not an active area of focus, right now. What we're focused on today is all the various ways that Web media can get to television.

[itvt]: Are you forming partnerships with any of the social-networking companies, such as Facebook?

Forman: I can't talk about the status of specific customer contacts, but there are lots of discussions going on, and there's a lot of stuff under development that brings us much more into social media. However, when it comes to penetrating that space, something to think about is this: while ICTV's ActiveVideo is, by far, the most flexible, fluid way to get broad distribution for Web media on television, many Web-oriented companies consider working through the operator environment to be a major challenge. Their natural disposition is to say, "Hey. Let's just keep the pedal to the metal in the open Web environment, where there's not a gatekeeper that sits between us and the customer." It's much easier for ICTV to target content companies that already understand the benefits of working with cable and IPTV operators as their distributors. They see our platform and say, "Whoa! This is a way we can get to volume fast!"

So while there is definitely interest in what we're doing on the part of the Web-based social media companies, from where they sit, working with operators to distribute their content on television seems really complicated, compared to the growth opportunities they already have on their native platforms. However, I think this is a barrier that is going to go away before too long: as more and more IP-based devices become available that bring Web media to the television, the pressure on the operators to open things up and to exercise less control is going to become very strong. There's no doubt about it.

I don't think we're at the tipping point just quite yet. But these things do build momentum quickly.

[itvt]: Could you talk a little about some of the ActiveVideo services that have been launched to date?

Jeffery: We're approaching the development of ActiveVideo services from a couple of directions. Our ActiveMedia Group is creating white-label applications like the ActiveVideo P:Mosaic, that's already been deployed at Grande Communications in Texas. We're also working with a great number of potential and existing programmer customers on standalone ActiveVideo channels; but the ones we can talk about openly are the ones that we've already announced or demonstrated this year: Fox, CNN, HSN, AccuWeather and Reuters.

One of the things that I find interesting is how our programmer customers collectively show how ActiveVideo can solve different kinds of problems for different kinds of content providers. CNN and HSN are two powerful television brands who understand the value of broadband, but lose their television "pole position" when they direct viewers to the Web for more information on a specific story, or to find a particular product. Conversely, AccuWeather and Reuters have a strong Web presence, but recognize the need to establish an audience on television, which studies have shown is still the preferred destination for the vast majority of viewers. Fox Reality, meanwhile, is a new, cross-platform channel that's been designed specifically to address the emerging audience of younger viewers who are growing up in an era of blurred distinctions between television and the PC.

We should also talk for a minute about P:Mosaic, because it really is something unique in television navigation. The concept of viewers being able to create and manage their own navigation screens, and to view multiple channels simultaneously, is one of those solutions where everybody wins. It solves that growing challenge for viewers of finding "stuff" in a television landscape of more and more choices, and allows operators, programmers and advertisers to achieve a greater level of precision in targeting viewer interests.

[itvt]: How do ActiveVideo channels appear in the EPG? Are they usually given their own channel number, like regular linear channels, or are they accessed via a portal?

Jeffery: The positioning of ActiveVideo channels will be up to the individual operator, but we believe that they should be side-by-side with linear channels in the guide. It's really the same thinking as cable used when it introduced digital channels: it made sense to make it as easy as possible for viewers to navigate from the channels they were used to seeing to the new channels they were receiving.

All that being said, we think it makes sense for viewers to have multiple ways to get to an ActiveVideo channel. We also see the type of navigation where you can jump from a linear channel to a related ActiveVideo channel by pressing the "A" key, or, of course, by clicking on the appropriate tile in your personalized P:Mosaic.

[itvt]: Are any of your customers using ActiveVideo to offer interactive TV gaming?

Forman: Yes. We're working with TAG Networks, using the same model of enabling programmers. Not only is TAG's game technology compatible with ActiveVideo, but TAG also views itself as a programming network. Its programming just happens to be games.

[itvt]: Are any of your customers using ActiveVideo to power user-generated content services?

Forman: There is nothing we can talk about here yet, but it's fair to say that there is a lot of interest among the UGC aggregators to get to television with the kind of interactive programming they offer on the Web. They realize that the essence of their programming is the audience involvement and interactivity. Taking UGC content to the Web as a series of clips in the VOD systems is really quite different than what the UGC aggregators offer on the Web and are working on in ActiveVideo.

[itvt]: Earlier this year, you announced an interactive TV advertising partnership with RGB Networks. Has that partnership resulted in the development of any new interactive advertising services?

Jeffery: Our partnership with RGB uses their technology to create the trigger that prompts viewers to jump directly to an ad showcase. It's not really designed to enable new services, but rather to help get viewers to ActiveVideo advertising in the most direct and efficient way possible.

[itvt]: Where have ActiveVideo applications been deployed to date?

Forman: On various cable and IPTV systems.

[itvt]: You can't say which ones?

Forman: Our largest deployment is at PCCW in Hong Kong. Grande Communications has a subset of these applications deployed. There are other deployments I'd love to be able to talk to you about, but I'm contractually prohibited from doing so.

Jeffery: Honestly, there really is a lot of stuff going on. It's just that we'd get our hands cut off if we talked about it.

Forman: The company has never been busier, has never had more projects going on, and has never been engaged with bigger names around the world than today.

[itvt]: Your technology was originally developed for cable, and now you've expanded it to address IPTV. Did you have to make any significant changes to the technology in order to do that?

Forman: What is great about ActiveVideo is that all the heavy lifting happens in the network. Programmers do not have to develop programming differently for cable or IPTV, or any particular middleware or set-top box. ActiveVideo shields the programmer from these differences because all that is required in the edge network is unicast bandwidth, an MPEG decoder and a real-time return path. To go to IPTV, we needed to do a small amount of one-time edge integration, but the payoff for programmers and advertisers is huge. Just as MPEG brought scale to linear programming and HTML and JavaScript standards brought scale to Web publishing, we bring scale to interactive programming on TV.

[itvt]: How will the transition to Switched Digital Broadcast impact ICTV's ActiveVideo Distribution Network?

Jeffery: Operators are headed toward having the capacity to have all- unicast networks. Switched Digital Broadcast is a key step in the path. What has really changed is that, as operators have gained experience with VOD, there is more comfort with unicast video services. Beyond opening up bandwidth for broadcast HDTV, Switched Digital Broadcast will enable more unicast services. With Switched Digital Broadcast and other technologies, operators are seeing that bandwidth will become a virtually inexhaustible resource, whereas, in the early days of VOD, there were concerns that bandwidth would run out.

[itvt]: As you're probably aware, there's now a growing broadband TV community out there. I take it that you've been reaching out to companies and content producers in that space...

Forman: Yes. We're very much part of that community. After all, what we're doing today is delivering what most people think of as broadband TV into the set-top boxes that are already connected to people's television sets. If you think about the CNN ActiveVideo channel, for example, that's broadband TV. It's taking broadband content and broadband editorial processes, and putting those on the TV's in people's livingrooms, as opposed to on the PC's that sit in their offices. It's certainly very much on our minds that there are many emerging ways for Web media to show up as television--and when I say "as television," I mean on that big screen in the livingroom that's managed by the remote control and typically viewed by more than one person at a time. We're absolutely committed to being the leader in delivering Web media to that big screen in the livingroom, and today we're working in partnership with cable operators and IPTV operators in order to do that. Over time, we will be working with other partners--which I can't discuss at the moment.

[itvt]: Partners like consumer electronics manufacturers and PC manufacturers?

Forman: Potentially.

[itvt]: So you're broadening your customer base?

Forman: Our customer base is programmers who want to put Web media on television. We're working with our customers in order to provide them with the broadest exposure possible, in the most economical and profitable way. When Mark and I say that there's a lot of new stuff going on at ICTV, part of that new stuff that we're referring to is that we no longer think of ourselves at this point in our company history as only a supplier to the cable industry.

Basically, as a company, we are always looking at all the possible paths through which Web media could get to television. Now one of the options at people's disposal is devices that connect PC's to the TV. However, I would argue that the vast majority of people are not going to be that interested in investing several hundred dollars on a device that can do that, and then crawling under their TV to connect it all together. People are looking for very, very simple solutions. So where are we seeing some of those simple solutions? Well, one thing we're seeing is that consumer electronics companies like Sony are starting to announce Internet-ready TV's. I think there are great opportunities in enabling programmers to deliver broadband interactive media to Internet TV's.

[itvt]: So would it be fair to say that one direction in which you're going would be to allow content providers to deliver their Web-based media to the television set through some kind of Web-based ASP service...?

Forman: Yes.

[itvt]: In other words, you would be bypassing the MSO's and working directly with the broadcasters and consumer electronics manufacturers?

Forman: I wouldn't characterize it as "bypassing." I'd characterize it more as, like any other media company, simply taking every path available to us in order to reach an audience. And there are many paths. However, where we have enormous uniqueness today is in being able to deliver Web media experiences to the tens of millions of deployed cable and IPTV set-top boxes. There's currently no one else who can do that. So no one's saying that we're running away from the set-top box. All we're saying is that, as new ways emerge to put Web media on television, we're going to be there. Because that's what we do.

[itvt]: You recently moved from Los Gatos to San Jose. What are the reasons behind that move?

Forman: We wanted to move the company into a more urban environment, where we could draw employees from throughout Silicon Valley and the peninsula, and where we're also very close to a rail line that runs all the way up to San Francisco. Whereas we were very much built as an engineering and manufacturing facility in Los Gatos, here we can look like a media company. Today, only a very small amount of what we do really has to do with the cable side of things. We're really now about creating new Web media for television and getting that media on television.

[itvt]: What kinds of employees are you looking to draw?

Forman: Here's an example: when we began to offer ActiveVideo, we transitioned our business development team to a group that had experience with ESPN, Comcast programming, Web portals and the entertainment world. We still need our people to understand how we do what we do, but it's more important that they have real expertise in what that means for our programmer customers and operator partners.

[itvt]: Has anything from your trials and deployments surprised you? Have you found that audiences are using ActiveVideo services in ways that you didn't expect?

Forman: The biggest thing we've seen in all of our work has been the "stickiness" of the service. Once you get people used to looking at and interacting with an ActiveVideo channel, they'll come back to it again and again. I'm not sure I would call that surprising, but it's reassuring to know.

[itvt]: What kinds of announcements should we expect to hear from ICTV over the coming months?

Forman: I think you'll be seeing a lot more clarity around what the initial rollout of ActiveVideo will look like. I can't get into specifics, but I'd like to think that by this summer we'll have major operators and programmers who will be on the cusp of going public regarding their ActiveVideo plans.

[itvt]: What have been the biggest challenges in implementing your ActiveVideo Distribution Network business strategy to date, and what do you think the biggest challenges will be going forward?

Forman: The biggest challenge has been the unbelievable clutter in the market of people who are trying to bring Web video to the television. There are all these third-party boxes and other solutions out there that are competing for the public's attention. At the end of the day, what we've found is that people don't want to buy and integrate another box that might become obsolete in a year; all they want to do is watch and interact with television in the simplest manner possible. That's what we enable.

URL: ICTV

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