Multichoice goes interactive

Early next year, Multichoice hopes to do two things never before achieved locally: build a viable set-top box Internet access market and create a true walled-garden Internet experience for its users.

Although no launch date has yet been made public, DSTV will probably start offering decoders with some intelligence and a return data path to its subscribers by late-March.

Limited interaction with data beamed to the decoders currently in use has been around for some time and ranges from detailed information on programmes to home loan calculators.

We know that these are fairly catchy services which become part of everyday life once you start using them.

Jonah Naidoo, GM interactive, Multichoice

But the return-path has been a long time coming. Early last year, executives at Multichoice, the DSTV parent company, were confidently predicting they would deliver two-way data to homes long before Christmas 2001. The launch was delayed to allow a new conditional access system to be implemented before next year, a logistic nightmare in its own right as all subscriber smart cards have to be replaced before end-December.

Even now, four months before the planned launch, details from Multichoice are scant.

Modems and keyboards are to be supplied to interested customers, but it is not known if these will be charged for. New customers are to be offered modems and keyboards packaged with their decoders, but it is not yet public knowledge whether these will form part of a promotional give-away or will be payable at the full price.

Subscribers may have to pay to use the interactive services. Or maybe not at first, or ever.

The number of users that DSTV expects to use the services is also being closely guarded.

"It is very hard to quantify these numbers," says Multichoice`s GM of interactive Jonah Naidoo. "It is one of those areas where you are trying to build your base and at the same time you are trying to build loyalty. It is hard to say what the conversion rate will be."

One thing the company is clear on, and publicly so, is the services it will launch.

E-mail, e-commerce and programme information will be available at launch, with an SMS application and games planned for the second wave.

"We have chosen a few key areas, largely in the communications space," says Naidoo. "We know that these are fairly catchy services which become part of everyday life once you start using them."

It depends very much on who ends up pushing the content down the pipes.

David Purnell, partner, Ernst & Young

The e-mail client will more closely resemble a barebones messaging application for much the same reason that general Internet access is not expected to ever be on offer.

"Unfortunately, it turns out that the Internet experience on TV isn`t great," says Naidoo.

Like almost all international players, Multichoice does not believe the definition on TV screens is likely to improve enough to make reading lots of text a pleasant experience. There is also the problem of user expectations, with TV known as a medium of instant gratification, which does not include waiting for page downloads with satellite latency. And couch potatoes are not really interested in intensive Internet browsing on their favourite passive entertainment device.

For these reasons, content on the interactive service is to be freed from as much text and data as possible, and users will not be allowed to break out into the wider world, certainly not at first anyway.

"We have spent a great deal of effort on simplifying the experience," Naidoo says. "We`ve said out of principle that we would stay away from bringing the Internet experience to TV."

The killer application that will see uptake of interactive services reach critical mass may not be e-mail or messaging, but integrated content.

"You are starting to see people integrating these services with the broadcast stream, with the programming, and that is where the value you get is just unbelievable," says Naidoo.

We will watch international developments very closely.

Clarissa Mack, GM regulatory affairs, Multichoice

The most commonly envisaged application is in e-commerce, with a service which allows the viewers at home to order one of those extremely lurid, but oh so fashionable, jackets that the presenter on their favourite programme is wearing.

But first viewers must be taught to interact with what they see on screen, and the best way to do this is by providing information rather than transactions.

Multichoice believes this would be as compelling in SA as elsewhere on the strength of its successful experiment in making contestant data available on the DSTV Big Brother channel, which until recently screened live footage from the Big Brother house 24-hours-a-day.

Naidoo says the data was largely used by regular watchers of the channel who were either looking for information they missed on the broadcast stream or wanted to delve deeper into background or news related to the show. Few of these viewers would have left their TVs to visit the Big Brother Web site from their PCs to find the same information.

"We find that is more and more what people want," he notes. "They complement the viewing experience with an interactive experience that enhances the broadcast for them."

To truly integrate data with the broadcast will take a couple of tweaks to the technology, which Naidoo predicts will come in the near future and with some skilful scheduling, but he says this lies in the future for DSTV, even if it could manage to do so now.

"We really wanted to keep it fairly simple as we roll-out these services and then as we build momentum, and perhaps understand the market a little better, we can add the bells and whistles."

More interactive TV, even when toned down for the lazy, may turn out to be a defensive mechanism to keep watchers tied to the tube instead of wandering the Internet outback.

We`ve said out of principle that we would stay away from bringing the Internet experience to TV.

Jonah Naidoo, GM interactive, Multichoice

Recent European studies have shown that Internet users spend less time watching TV than those without access, and the longer they have been using the Internet, the less they watch.

The researchers say the reasons behind the behaviour are not well understood, but the behaviour itself is clear enough.

The threat would be even more pronounced if those subscribers had access to, for instance, ADSL with video-on-demand available over it. Telkom is planning a DSL roll-out sometime next year and has already said it sees value in providing content over those connections, including video on demand.

There is no reason why Telkom could not become a successful content packager, market watchers say.

"It depends very much on who ends up pushing the content down the pipes," says David Purnell, the Ernst & Young partner heading up the company`s technology, communications and entertainment division. "If Telkom decides to become a content provider or signs some sexy deals, it could make it work."

SA may never have seen the age of cable TV, he says, but as convergence pushed cable broadcasters in America to provide Internet access, so convergence will see Internet access providers move into content.

Until recently it seemed the launch of interactive DSTV would be delayed again, perhaps indefinitely.

With the growth we have seen in the rest of Africa it makes great sense to roll-out interactive in these areas.

Jonah Naidoo, GM interactive, Multichoice

During the long process that was the making of the Telecommunications Amendment Bill, a new concept unexpectedly made its appearance: the multimedia licence.

Generally seen as a way to up the value of state-owned enterprise Sentech, which would originally have been the only holder of such a licence, the multimedia clause was interpreted by some as outlawing most Web sites as well as DSTV broadcasts with data attached.

But the latest version of the Bill, currently before President Thabo Mbeki and expected to be signed into law any day now, grudgingly accepts that others may already be actively using multimedia without any licences and gives them the right to continue doing so.

Does Multichoice still have reason to worry about the legality of its offering now that it is putting one foot in the murky telecommunications regulatory world?

If Telkom decides to become a content provider or signs some sexy deals, it could make it work.

David Purnell, partner, Ernst & Young

Definitely not, says regulatory affairs GM Clarissa Mack.

"M-Web needs a VANS [value-added network service] licence to provide the return path, and it has that," she says. "DSTV does not need a licence to broadcast the initial information."

With the changes in the legislation there is also no longer the possibility that Multichoice will go to Constitutional Court to safeguard its right to provide interactivity.

"We would only potentially challenge the Bill if somebody said that our service was illegal because of it," Mack says.

Other legal minefields remain, however, mostly because of copyright concerns when decoders become personal video recorders (PVRs), a step Multichoice is contemplating for the first half of 2003.

In America, the makers of the ReplayTV are facing copyright lawsuits because broadcasters fear the PVR, which also allows ad-skipping and the sharing of certain programming over the Internet, will make rubbish of their copyright.

As the broadcaster, DSTV holds the rights to the distribution of the content it broadcasts for the African region, but Mack says the company will do everything it can to defend those rights against unauthorised redistribution by its subscribers.

The different channels that make up the DSTV bouquet are also likely to be worried about the quality of digital recordings and the ease with which these could propagate over a network of connected PVRs, she says, and it is likely re-recording from PVRs will be blocked.

However, DSTV has the luxury of watching international disputes and battles develop over the next year and seeing which way the wind is blowing.

"We will watch international developments very closely," says Mack.

Multichoice is to reveal many details of its plans early next year, not the least of which will be the exact relationship between it and M-Web, which, while providing the backbone of the interactive service, is also to allow other ISPs a share of the pie.

Naidoo will say only that DSTV will retain its billing relationship with subscribers, but says ISPs other than M-Web may soon be accommodated as suppliers of the return path.

The financial details of the deal with M-Web could be important, as it would determine the price DSTV is likely to charge its subscribers. Analysts say price will be the final determining factor in the penetration interactive TV finally achieves, even in local markets where current DSTV subscribers are in the upper income bracket.

Others will keep a close eye on Multichoice`s roll-out plans for the rest of Africa.

"We plan to roll-out in certain countries and then try to expand that," says Naidoo. "With the growth we have seen in the rest of Africa it makes great sense to roll-out interactive in these areas."