VOD, one of the first and most successful instances of interactivity, has had a clear-cut business case since day one, but others forms of interactivity are less proven. According to recent research from Parks & Associates, however, there is a place for paid apps on the TV. Parks’ surveys found that 33% of US broadband households were interested in TV widgets and might even pay for the really good ones – either in the price of a TV or as an additional subscription cost. Outside of that, advertising could be where the real money lies, according to Kurt Scherf, Parks’ vice president and principal analyst.

“Widgets, in and of themselves, present the opportunity,” Scherf said. “Verizon can deploy a feature like a casual games service and, using EBIF, allow the sales team to sell static ads that wrap around the user interface for that application itself. Any ad revenue that the operator can get is a plus for them at this point.”

Existing models today shut service providers out of the majority of the revenue in advertising, Scherf added. For every hour of programming they deliver, they traditionally get two minutes to sell the ad slots – the rest of the ads are sold by the programmer. For the operator, the next best thing to introducing more minutes to the hour is taking advantage of interactive apps to sell ads, he said. Services like t-commerce to place an order direct on the TV screen or telescoping into ads to receive more information, on the other hand, just haven’t been practical to do yet. These features have been discussed for some time, but the business model – and content rights – have yet to be worked out yet, Scherf said.

From the article, "Will interactivity equal revenues?" by Sarah Reedy

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