"The TV has always been another household appliance. Now it can have a life of its own," says Ricardo Saldarriaga, president of the Colombian company TV Cable S.A. The "bet" for the interactive future of this technology, which has accompanied us for so many years, was predicted last August when this subscription television operator, together with the American company WorldGate Communications Inc., announced the launch of the interactive television service for Bogotá, the first of its kind in Colombia. According to WorldGate estimates, interactive television will grow globally by 45% over the next five years.
The agreement reached between TV Cable and WorldGate involved packaging the services of the North American company in premium channels, in order to allow subscribers access to the internet, chat, games, local interactive content and email. In fact, each family can have up to five custom accounts, with the ability for parents to control their children's access. To do this, TV Cable delivers a SURFview wireless set-top box, from Motorola, with software developed by WorldGate.
But the idea offered by WorldGate goes far beyond a list of services. Thus, by pressing a key on the TV, the subscriber can enter, for example, the web page of the tuned channel, instantly request some additional data or send an email. Of course, the success of the system lies in the fact that the subscriber can have access to a large number of local financial, health, culinary or entertainment services. "We are addressing a segment of the population that is interested in the possibilities of the internet and interactivity, without having to sit in front of a computer," explains Saldarriaga, of TV Cable. The notion of "interactivity" of WorldGate corresponds to walled garden television or controlled bidirectional content, an intermediate stage between unidirectional interactive television or broadcast interactive content (which would include the so-called "enhanced" television) and that of access to unlimited bidirectional content.
The system developed by WorldGate is based on open and flexible standards. Each cable operator that implements it, has the possibility to adapt the basic service to the needs and cultural characteristics of its subscribers, in order to allow changes of color, photographs, icons and links in the interface.
How complex is information processing for a cable company? According to the American company, each header can handle up to 100 sessions at a time, depending on the configuration chosen and the demand. As it is estimated that the percentage of subscribers using the service simultaneously equals 5% of the total, a header unit can normally serve about 2000 WorldGate subscribers. The server is designed to allow more capacity when adding additional drives. On analog cable, WorldGate delivers its service using the vertical blanking interval (VBI). The transfer of information in existing analog infrastructure is 350,000 bits per second. In digital cable, the speed ranges from 27 to 38 million bits per second.
"This step is not a leap into the void for us," says Alejandro Bernal, vice president of business at TV Cable. Quite the opposite. It is the natural development of our business model, consisting of delivering a service with an increasingly greater added value". The trajectory of TV Cable comes from far back; this company began operating in October 1987 with four UHF channels, whose broadcast and edition was done locally.
In January 1995, the company started the operation of a fiber optic network and, since July 1997, offers high-speed internet service via cable modem. Currently, TV Cable has a 700-kilometer HFC network that works at 750 megahertz, which allows it to offer television services (61 basic channels, 5 premium and 8 PPV channels) and high-speed internet access. CABLE TV has more than 10,000 internet subscribers.
On the side of WorldGate, likewise, the agreement with the Colombian company offered good opportunities. "With the launch of our interactive television service in Colombia, WorldGate strengthens its position as the largest provider of interactive television in all of Latin America," said Gerard Kunkel, President of WorldGate. But in addition, TV Cable offers potential for its particular business position: "This company is a close and key client for us in Latin America," says Dave Wachob, Vice President for Latin America at WorldGate. They have unique ties to many critical industry leaders as well as content providers in Colombia."
According to TV Cable, during 2002, the company's investments in the expansion and consolidation of its network, including new interactive services, will be about $27 million.
The idea of WorldGate is to offer a middleware service based on an open architecture with industrial standards, which ensures compatibility with new products (analog and digital) that arise but, at the same time, that takes advantage of the existing infrastructure, especially the old analog decoder boxes.
Similarly, WorldGate's technology makes it possible to offer a multiplicity of services to the subscriber, such as interactive applications, video on demand (VOD), electronic guides, television internet, improved television and access to related programming and web pages, for the end user to access, according to the company, the "full experience" of interactive television. Likewise, the "integrated" approach lies in the fact that WorldGate offers complete support to the cable operator in terms of products, services, maintenance, monitoring and support.
According to WorldGate, cable is one of the most promising areas in the development of communications, hence the business importance they have given to the sector. According to their estimates, cable passes through almost 100% of homes in the United States and effectively reaches 70% of them. Thus, WorldGate believes that interactivity is the next step of cable television and the gateway to interactivity with internet access. The novelty of the approach is that it is not based on the computer, considered by many as the optimal interactive technology, but on a television connected to the cable system. Even those subscribers who already have internet services, can be potential customers since the cost is less than the monthly payment paid to any internet service provider (ISP). The daily use of the cable exceeds eight hours a day in that country.
Perhaps this is why Latin America offers so much interest to WorldGate: "In that region there is a low penetration of PCs (WorldGate does not require a computer), marginal or expensive telephone lines (WorldGate does not depend on telephone lines) but, at the same time, a great consumer interest in the internet. It's ideal for us," says Wachob of WorldGate.
The idea, of course, is to reach that cable operator interested in taking advantage of the commercial potential of interactive television, through the sale of content, advertising, television commerce (t-commerce), software and hardware, in addition to the monthly payments paid by the subscriber. The idea is not to depend on a single investment by the subscriber but to achieve a continuous flow of purchases. The utilities of this process are divided with the local operator into predetermined percentages.
Currently, WorldGate has agreements with 59 cable systems, with 25 operators in 13 countries. In Latin America, WorldGate operates together with seven cable companies, in addition to CABLE TV in Colombia, Argentina, Mexico City, Monterrey (Mexico), Nassau, Bahamas, Santo Domingo, Dominican Republic and Lima. Its partnerships include companies such as Adelphia, Charter, Comcast, Digital Latin America (DLA) and Cox, for the development of products, programming and programs.
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