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Mobile phones power iTV in Europe

11/6/2002

London, UK, - An increasing amount of Europe's TV shows are reaching out to cell phone users to give their programs an interactive element reports The Economist.

Broadcasters there are posting telephone numbers to which viewers can send text messages from their mobile phones. According to research about to be published by Gartner, a consultancy, text messaging has recently overtaken Internet use in Europe. One of the fastest-growing uses of text messaging, moreover, is interacting with television. Gartner's figures show that 20% of teenagers in France, 11% in Britain and 9% in Germany have sent messages in response to TV shows.

This has much to do with the boom in "reality TV" shows, such as "Big Brother", in which viewers' votes decide the outcome. Most reality shows now allow text-message voting, and in some cases, such as the most recent series of "Big Brother" in Norway, the majority of votes are cast in this way. But there is more to TV-texting than voting. News shows encourage viewers to send in comments; games shows allow viewers to compete; music shows take requests by text message; and broadcasters operate on-screen chatrooms. People tend to have their mobiles with them on the sofa, so "it's a very natural form of interaction," says Adam Daum of Gartner.

It can also be very lucrative, since mobile operators charge premium rates for messages to particular numbers. The most recent British series of "Big Brother", for example, generated 5.4m text-message votes and Ł1.35m ($2.1m) in revenue. According to a report from Van Dusseldorp & Partners, a consultancy based in Amsterdam, the German edition of MTV's "Videoclash", which invites viewers to vote for one of two rival videos, generates up to 40,000 messages an hour, each costing euro0.30 ($0.29).

A text contest alongside the Belgian quiz show "1 Against 100" attracted 110,000 players in a month, each of whom paid euro0.50 per question in an eight-round contest. In Spain, a cryptic-crossword clue is displayed before the evening news broadcast; viewers are invited to text in their answers at a cost of euro1, for a chance to win a euro300 prize. On a typical day, 6,000 people take part.

TV-related text messaging now accounts for an appreciable share of mobile operators' data revenues. In July, a British operator, mmO2, reported better-than-expected financial results, thanks to the flood of messages caused by "Big Brother".

Operators typically take 40-50% of the revenue from each message, with the rest divided between the broadcaster, the programme maker and the firm providing the message-processing system. Text-message revenues are already a vital element of the business model for many shows.

Inevitably, there is grumbling that the operators take too much of the pie. Endemol, the Netherlands-based production company behind "Big Brother" and many other reality TV shows has started building its own database of mobile-phone users. The next step will be to establish direct billing relationships with them, and bypass the operators.

Why has the union of television and text message suddenly proved so successful? One important factor is the availability of special four-, five- or six-digit numbers, called "shortcodes." Each operator controls its own shortcodes, and only relatively recently have operators realised that it makes sense to co-operate and offer shortcodes that work across all networks. The availability of such common shortcodes was a breakthrough, says Lars Becker of Flytxt, a mobile-marketing firm, since shortcodes are far easier to remember when flashed up on the screen.

The operators' decision to co-operate in order to expand the market is part of a broader trend, observes Katrina Bond of Analysys, a consultancy. Faced with a choice between protecting their margins and allowing a new medium to emerge, operators have always chosen the first. WAP, a technology for reading cut-down web pages on mobile phones, failed because operators were reluctant to share revenue with content providers.

Having learnt their lesson, operators are changing their tune. In France, one operator, Orange, has even gone so far as to publish a rate card for text-message revenue-sharing, a degree of transparency that would once have been unthinkable.

At a recent conference organised by Van Dusseldorp & Partners, Han Weegink of CMG, a firm that provides text-message infrastructure, noted that all this is subtly changing the nature of television. Rather than presenting content to viewers, an increasing number of programmes involve content that reacts to the viewer's input.

That was always the promise of interactive TV, of course. Interactive TV was supposed to revolve around fancy set-top boxes that plug directly into the television. But that approach has a number of drawbacks, says Mr Daum. It is expensive to develop and test software for multiple and incompatible types of set-top box, and the market penetration, at 40% or less, is lower than that for mobile phones, which are now owned by around 85% of Europeans.

Also, mobile-phone applications can be quickly developed and set up. "You can get to market faster, and with fewer grasping intermediaries," says Mr Daum. Providers of set-top box technology are adding text-messaging capabilities to their products.

The success of TV-related texting is a reminder of how easily an elaborate technology can be unexpectedly overtaken by a simpler, lower-tech approach. It does not mean that the traditional approach to interactive TV is doomed: indeed, it demonstrates that there is strong demand for interactive services. People, it seems, really do want to do more than just stare at the screen. If nothing else, couch potatoes like to exercise their thumbs.

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