ITV Sure of Its Destiny

Paul Kagan

Sitting at the starting gate

Hang around with a couple of hundred interactive TV diehards — as I did in New York April 10-12 — and at least one message comes through loud and clear: The ITV industry has the same kind of sense of its destiny that cable had 50 years ago.

Even if you weren’t in the business then (I sure wasn’t, but I’ve heard the stories round the cable campfire), you can hear the echoes of Bill Daniels, Martin Malarkey and Milt Shapp in these quotes from my third ITV Summit:

Bob Pittman, co-COO of AOL Time Warner: “Interactive’s time has finally come; it’s becoming central to people’s lives. It’s not there yet, but we’re at the point of breaking the code on what the consumer wants. And the potential is huge.”

Steve Necessary, CEO of PowerTV: “We’re a lot closer than QUBE in 1977, Sprucer in ’85, John Malone’s 500 channels in ’92 and the Full Service Network in ’95.”

Carla Sinatra, VP-business development, NBC Digital: “You can do ITV as long as we’re under the radar, like now. Hopefully, now that we have all this technology in place, the contractual arrangements among networks, advertisers, cable and satellite operators won’t hold it all up.”

Ah, how familiar the refrain. It might as well be 1975, when it wasn’t clear if Hollywood and HBO would ever make a deal that would stick or, indeed, if HBO would even survive.

RespondTV president Richard Fisher cited 20% to 50% response rates and called ITV the “greatest deal-generation machine in the history of direct marketing.” But he also listed at least six factors keeping ITV at the starting gate instead of racing to the finish line:

* Challenges in relationships among advertisers, program networks, syndicators, studios, VOD and pay-per-view distributors, content producers, media buyers and ad sales executives.

* Audience and channel fragmentation.

* Multiple technology standards.

* Challenges in integrating production, engineering, ad sales, affiliate sales, legal, program acquisition and business development people.

* Poor first-generation experiences.

* Lack of immediate profitability.

Despite these hurdles, all of the 59 speakers, like the pioneer cable guys, were adamant that the prize was worth the battle. Lehman Bros. investment banker Glenn Schiffman said, “We’re in the first inning of this game.” And buyside analyst Alan Gould of J.P. Morgan Fleming Asset Management, noting how depressed ITV stock prices have been, said, “You can go long a package of ITV stocks today and you’ll do better than going short the package a year ago.”

Analyst Paul Kagan writes exclusively for “Cable World.” He is an active investor and money manager and often owns securities mentioned in his columns. He may buy or sell before and after the columns are published, and his positions may change at any time. Information in his columns does not represent a recommendation to buy or sell securities, nor is it a solicitation of any securities transaction. Kagan is vice chairman of Primedia Ventures, an affiliate of the owner of “Cable World.”

COPYRIGHT 2001 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.

COPYRIGHT 2003 Gale Group

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