Interactive!

The two hosts of the new reality show now or never run through the streets of German cities with camera crews, stopping people at random to ask if they would like a free plane ticket to an exotic destination like Bali. The catch is the plane is leaving in two hours, they have to go alone and they must race an unknown number of other contestants to get to the airport ticket counter first. The audience competes for a second free ticket by downloading street maps and other information from the Web to become the first to figure out which contestant will win.

“The viewer is becoming part of the program,” says Kai Hübers, channel manager for Europe Online and co-developer of Now or Never, which will appear as streaming video on the Internet this month. By autumn, people will be able to participate in the show on either a PC or a television; the web content and the television programming will be fused.

Welcome to the future of entertainment, in which highly interactive, highly personalized content is delivered via fast two-way connections over TVs — as well as PCs and mobile phones. You will never watch TV the same way again.

John Morris, chief operating officer of Europe Online, which is producing Now or Never, says that in the near future an avatar — a character that exists only in cyberspace — will greet us when we turn on our televisions. “Good evening, you have five e-mail messages waiting. Would you like to read them now? While you were at work today I downloaded some of your favorite music from the Internet. Would you prefer to listen to that or look over the selection of broadcast TV shows and movies that I saved for you?”

Call it MyTv. Viewers will be freed from broadcast schedules and able to create their own programs. Already subscribers to Britain’s Sky News Active can select individual news stories from a menu instead of having to watch an entire show. Those with personal video recorders (PVRs) can decide when to watch movies and TV shows that were originally broadcast live.

Once more sophisticated set-top boxes come on the market, TV operators will be able to offer real video-on-demand services. Each week, an operator — like the local satellite TV company — might download onto the subscriber’s hard disc four or five new movies, which would then be available for watching any time. Subscribers would also be able to choose films from a catalog, download them during the night and watch them the following day.

Both PVRs and video-on-demand allow for that personal touch. Would you like to see Penélope Cruz or Gérard Depardieu? Do you prefer dramas or comedies? Just select your favorite actors and film genre on your TV’s “personal screen,” and all the programs matching those keywords will be automatically recorded.

Look for a plethora of interactive services. Vivendi Universal’s Canal Satellite and rival TPS already offer a way to alert football fans watching one game that a goal is about to be scored in another. Thanks to a 30-second delay, the viewer can switch to the other game, watch the goal, then click back again. Before long these fans will also — with a click of the remote — be able to find out where European stars Luis Figo or Fabien Barthez bought their soccer shoes and order some just like them. The Amsterdam office of Forrester Research predicts sales of goods over interactive TV in Europe will jump from $655 million this year to $2.1 billion next year. By 2005, it figures that European households with interactive TV will spend $260 a year on items purchased over the TV.

Europe is 12 to 18 months ahead of the U.S. on the rollout of interactive television (ITV) services, according to Merrill Lynch. That lead can be chalked up to three factors: satellite TV is more popular in Europe than in the U.S., and satellite operators are the early adopters of interactive technology; PC penetration in homes is lower in Europe than in the U.S.; and Europeans are used to interacting with their TV sets — they have been using teletext services since 1977. Says Paul Zwillenberg, executive vice president and managing director of KPE Europe, which has digital media production operations in Los Angeles, New York and London: “We find Europe is much more open to innovative interactive TV programming than the States because of the infrastructure that is in place here and the critical mass of users.”Some 18 million European viewers already subscribe to digital TV. London consultancy Datamonitor predicts the number will jump to 65 million households — 45% of the European population — by 2005. While customers now choose digital TV because it brings in more channels, they will soon be drawn to the much more sophisticated — and costly — interactive services that digital TV can bring. Indeed, Britain’s BSkyB says it wants to use interactive services to increase its revenue per subscriber from $415 to $585 by 2005. Some 93% of the 14 million subscribers Canal Satellite has across 11 countries already use interactive services. One of the most popular: betting on horse races, which generates more than $200,000 a day in France alone.

TV providers and programmers are already moving away from replicating services available through the PC — such as betting, online banking or ordering pizza — to providing ones that enhance the relationship between the viewer and the broadcaster. Consider announcements made just since the beginning of the year: French satellite pay-TV operator tps is launching an interactive version of Who Wants to Be a Millionaire? that lets viewers compete to participate in the game; Spain’s Via Digital, another satellite pay-TV operator, will offer Internet access, television-based e-mail and personal video recording; Polish television network Telewizja Polsat will introduce interactive sports broadcasting and games; Danish cable company tdc Kabel TV and Gameplay will offer a cross-platform, multiplayer game channel that will allow people playing games via their televisions to pit their skills against those playing on personal computers. “The whole time I was producing free-to-air TV my dream was to make something interactive but it was technically not possible,” says Jochen Massmann, executive producer of Europe Online’s Now or Never. “Now the two worlds of TV and Internet are working together in an amazing way.”

As the interactivity becomes more sophisticated the lines between Internet and TV blur. Virtuebroadcasting is teaming with telco Interoute to deliver broadband Internet video streaming Europe-wide. European cable TV operator upc has merged its broadband unit with its TV operations while German multimedia group Bertelsmann has linked its broadband unit with rtl, Europe’s biggest TV company. “Two-way broadband will transform programming so radically through the installed base of TVs that it will create almost an entirely new medium,” predicts Alex Baldock, head of broadband and interactive television at Net Decisions, a digital services company in London. “The software guys, the big Internet guys, the broadcast guys — all the players recognize the integration of TV and Internet is the next step,” says Morris of Europe Online.

To some extent it is already happening. When Victoria Real, a British digital media production company, created a website to complement the reality TV show Big Brother offering streaming video, chat rooms, voting facilities and other interactive elements, it recorded 300 million page views in 65 days, according to Jason George, Victoria Real’s creative director. In the Netherlands, the creators of TypoToons, a children’s show on TV station vpro, ended each program by referring the pint-sized audience to its website. There a professional writer would work with kids’ online suggestions to create the story and animated images for the next week’s program. Some children were even invited to visit the studio and join in games to move the storyline further. An updated version of the show, called TattleToons, which will make even greater use of the Web, will air this autumn.

“All the different platforms are starting to affect each other,” says Jenifer Powell, head of entertainment at KPE Europe. A New York-trained playwright, Powell was hired by the London office of KPE to create new forms of storytelling that leverage the possibilities of cross-platform entertainment. The company plans to place creative teams in French and German cities during 2001 to work on local-language interactive digital-television programming. An example: murder mysteries that viewers can solve with clues from their TVs, personal digital assistants, personal computers or mobile phones.

The appliance that will make all these sophisticated services possible is a new box that sits atop the TV. Resembling a low-end computer, it will be equipped with high-speed multimedia interfaces that can communicate with CD players, dvd players and camcorders and will also include hard disc space for recording digital video. Some of these set-top boxes will include connections for linking to the PC and into the home network. Once Canal Plus Technologies releases its next-generation boxes in 2002, clients like Canal Satellite and the U.K.’s OnDigital can begin offering a merged TV and Internet service. In a prototype demonstrated at the company’s Paris headquarters, a viewer could watch the movie The Deer Hunter while simultaneously e-mailing, chatting and ordering merchandise.

There is one more hurdle to overcome: competing operating systems. Just as in VCRs and PCs, the interactive TV sector is the battlefield for major players — Open TV, Liberate and Media Highway, owned by Canal Plus Technologies — fighting for dominance. Even Microsoft is entering the fray, trying to extend its Windows empire into the TV world. In addition to some ambitious trials in the U.S., it is working with TV Cabo, a national cable TV operator in Portugal, to offer e-mail, banking, shopping, games and high-speed Internet access.

Competing standards make life difficult for content providers. Instead of having to produce one interactive TV format, they have to turn out separate ones. For example, the new 24-hour interactive MTV channel scheduled to launch in northern Europe in April has to design its content to be compatible with Liberate, Open TV, Microsoft and a new standard called Multimedia Home Platform, or MHP. The dual platform problem should start to fade as Europe migrates toward MHP, predicts Paul de Bot, head of strategy and business development at Philips Digital Networks. MHP was developed as an open system by the industry’s largest players, including Philips, which plans to demonstrate its new mhp-standard set-top box at CeBIT.

Over the next 12 months all of the players will be testing the market to see which interactive services and programming consumers will like the most. If European players want to maintain their edge, they will have to act fast and be innovative. They are, in many ways, facing the same challenge as contestants in Massmann’s reality show: it’s now or never.