Tune in, look sharp and switch on to iTV

Couch potatoes watch out - interactive TV is coming and it's all about participation. But will it live up to the hype? George Cole investigates

You're late home from work and you've missed the hot news story of the day. But it's not a problem because by simply pressing a button on a remote-control handset, you can instantly see it on your TV screen. You flick over to the sports channel and watch the Australian Tennis Open where Boris Becker is slugging it out. Press another button and you read his tournament statistics. You fancy a laugh so you change to the comedy channel. The comedian's jokes are as funny as a migraine, so you press a button and he vanishes to be replaced by another performer in the same show. Welcome to the wonderful world of interactive TV.

This may sound futuristic, but more than 85,000 viewers in Southampton and London can receive this type of service today. The cable company Videotron offers around five hours of interactive programming daily. Interactive TV (iTV) is being hailed as the biggest revolution in broadcasting since the arrival of TV.

Detractors say iTV is going to be the easiest way to blow an awful lot of money. But BT has been sufficiently encouraged by its iTV experiment in East Anglia (see panel) that it is considering spending pounds 500m on a commercial experiment next year.

The concept behind iTV is simple: instead of passively watching TV programmes, viewers become actively involved in deciding what they see and when they see it. It means that, for example, instead of merely watching a quiz programme, you can become one of the contestants, or if you don't like the director's choice of a camera angle, you can select another one.

Interactive TV has excited broadcasters, cable, computer and telecoms companies around the world. There are more than 60 iTV trials taking place, from Shanghai to Santiago, from Helsinki to Orlando. Several major trials are being held in the UK (see panel). Companies involved include AT&T, BT, Bell Atlantic, Time-Warner, Hong Kong Telecom, Telecom Italia and NTT. The biggest of all, due to start in in mid-1996, will involve around 15,000 homes in Hong Kong, but most trials involve fewer than 500. The early trials were set up to see whether the technology for delivering iTV into the home worked, but the latest are designed to find out what interactive services viewers want - and whether they are prepared to pay for them.

Interactive TV is not cheap to produce or deliver. Most systems use giant computer servers that act as video jukeboxes. These hold tens of gigabytes of data and may have to cope with hundreds of different commands at any one time. All this calls for some pretty heavy processing power. In the home is a set-top box connected to the TV and controlled by a remote handset. The viewer selects an item from an on-screen menu and the command goes back to the server. Fibre-optic cable, conventional TV transmitters and ordinary copper telephone wires are being used to deliver iTV to viewers.

An interactive programme can be watched as if it were a tape in your VCR. If the phone rings, you can pause it, if you're bored you can fast- forward, or if you didn't catch something, you can rewind. It's clever technology, but can operators make a profit on iTV? "There are no standards in this area, so people are having to grope around because there's no technology you can buy off-the-shelf," says John Matthews, principal consultant of the market research firm Ovum, and co-author of a major report on iTV. Standards are key, he says, "because the cost of the set-top box has to come down and this will only happen when you have some degree of standardisation."

All iTV providers are desperate to find what's been called iTV's "killer application", the feature that makes interactivity a must-have service. But this hasn't been easy. Until recently the front-running "killer app" was video-on-demand (VOD), which enables viewers to order movies any time of the day. But users' reactions to VOD have been disappointing. Another problem is that films are expensive to store and deliver - and with many people living close to a video hire store, you can't charge too much of a premium for the service: "The cost of VOD is enormous and even with the falling cost of computer technology, I can't see it becoming viable," says Andrew Curry, Videotron's head of interactive TV.

The trials have yielded some interesting and unforeseen results. A Time- Warner trial in Orlando, for example, found that the most popular facility was being able to order stamps from the post office. The results of some early trials, coupled with a growing realisation that iTV is an expensive service that does not guarantee a return on massive investment, has led some companies to cancel or downgrade trials. "There has been a lot of hype about interactive TV and as a result, it has not lived up to expectations," says Malcolm Bird, chief executive of Online Media. "I'm not surprised because some of these were false."

Even so, supporters of iTV believe there is a place for interactivity. The argument is that people have always been interactive with their TV: they shout out the answers to quizzes or call for the referee to be sent off. Interactive TV simply takes this further. "Interactive TV won't kill off the couch potato," says Andrew Curry, "but the evidence is that there are times when viewers want to be part of a television event, want to participate and want to get involved in what they see." Many companies around the world are hoping he's right.

Where to find iTV

iTV in the UK

BT is testing iTV in 2,500 homes in Colchester and Ipswich. The trial, which ends this summer, has cost more than pounds 50m. BT's system uses a technology called ADSL, which allows VHS-quality pictures to be sent down copper telephone lines. The set-top box is a cut-down Apple Macintosh computer. Services on offer include home shopping and banking, video-on- demand (VOD), TV programmes, music videos, local news and interactive adverts. Participating companies include Selfridges, WH Smith, Thomas Cook, BBC, BSkyB, Carlton, EMI, Polygram, Sony, Columbia Tristar, Warners, Anglia TV and Channel 4. Hardware is free, but the basic service is pounds 4.99 per month.

Online Media

Online Media is an offshoot of Acorn Computer. Around 100 Cambridge Cable customers are involved and a handful of schools. The number of homes receiving the service is expected to grow to 250 this year. Programmes are delivered by a mix of fibre-optic and coaxial cable. Hardware and services are free. Users can select TV programmes, games, home shopping and banking and interactive magazines. Companies taking part include Anglia TV, BBC, IPC Magazines, the Post Office and Tesco.

Two-Way TV

This system uses ordinary TV transmitters to deliver teletext-like graphics into the home. Two-Way TV superimposes text and graphics over the normal TV picture, such as quiz questions and plot summaries. The system is being used with more than 30 different shows, including Telly Addicts, Coronation Street and Question of Sport. A special box plugs into the TV and phone socket, and viewers use a large infra-red handset. Two-Way TV is available in the Central TV area and costs pounds 5.95 per month. Two- Way hopes to roll out its system nationwide, but this depends on whether it can raise enough capital.

TVinteractive

Not a trial, but the name of the interactive channel offered by Videotron. Viewers can watch weather reports and travel information by using their remote control. The music programme The Box offers information on new record releases, dance events and so on. Sports fans can call up information on scores and player biographies, and there is an interactive version of the news programme London Tonight. Videotron is set to launch a live weekly interactive music show, which will be transmitted from a club. Viewers will be able to watch the band, select camera angles and go backstage.