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International firms smile on Wink's technology

Wink Communications signs a broadcast company in Japan to deliver enhanced TV programming, another sign that the market for interactive TV services is growing.

Wink Communications, a provider of technology for interactive television, signed a broadcast company in Japan to deliver enhanced TV programming, another sign that the market for such services is growing.

Alameda, California-based Wink Communications said Japanese broadcast station TXN-Kyushu has started broadcasting enhanced television programming and e-commerce interactive TV enhancements with its technology. Four networks, along with a direct broadcast satellite operator, are providing interactive services via Wink technology, the company said.

Interactive broadcasts that use Wink technology have the ability to reach more than 57 million homes in Japan, according to Wink.

The idea of enabling televisions or set-top boxes to let consumers respond to ads directly and view programming-related content is an enticing one to TV makers, content providers, technology companies, and a host of other intermediaries such as cable companies. For example, Wink notes that Ceceile, a large catalog company that sells lingerie, has customers ordering products on television via its system, with an average order size of $100.

The potential boost in revenues from the ability to offer e-commerce and personalized advertising represents a huge, but ultimately unknown, opportunity. Unknown, because broadcasters and advertisers are unsure which technology to bet on, and because the mass market could still ultimately decide it doesn't care about doing anything more with television than changing the channel.

Interactive is bigger abroad
So far, analysts say many markets in Europe and Japan are seeing more widespread deployments ahead of the U.S. in part because consumers in countries such as the United Kingdom already are using a more rudimentary form of data services on their television.

For instance, OpenTV recently announced that its software has shipped in more than 3 million devices capable of receiving enhanced TV broadcasts. Satellite operator BSkyB in the United Kingdom, Via Digital in Spain, and pay TV operator Austar in Australia are counted among its customers.

Another company, Liberate Technologies, formerly known as Network Computer, has made the majority of deployments and deals for its technology for interactive television in Europe and Japan. It has deals to provide technology to Big Globe, an Internet service owned by the Japanese conglomerate NEC, which has about 3 million customers, and snared four other Japanese telecommunication companies last year with a combined customer base of approximately 13 million Japanese households.

To be sure, Wink and other technology providers are striking deals in the United States. Wink said its technology is available in 120,000 homes in the United States, and Liberate in recent months has signed deals with America Online and US West.

In addition, OpenTV's technology will be released to at least 2 million set-top boxes used by satellite provider Echostar, and Microsoft's WebTV service, enabled through the purchase of a separate Internet set-top box, has about 800,000 subscribers in the United States, Canada, and Japan.

Are consumers tuning in?
But actually getting consumers to tune in, no matter what the continent, is another matter, some analysts say.

"Interactive TV so far is a great idea, but very few people are actually using it," said Jon Peddie, president of market research firm Jon Peddie Associates. "The fact that you've signed up someone for a service is different from a fact of someone using it on a regular basis."

Peddie said he doesn't believe that interactive television will never catch on but that it will be a long, slow, and confusing process.

One problem is that even once there are hardware receivers--such as TV sets or cable set-tops--that can allow interactivity, there also is the issue of how many TV programs are being enhanced with content such as targeted ads and related show info, such as statistics. There, too, foreign markets are ahead, if mostly by virtue of companies having started their experimentation there sooner.

"We've been in Japan since October of 1996, so we've got more results there" in terms of deployments and hours of enhanced programming available, said Wink spokeswoman Katie Sullivan. "The good thing about that is that it's a direct indication of how things should work here."

A number of companies are working on efforts to standardize certain technologies to help program providers make enhanced content available to a wider audience. Still, Peddie predicts there will be a great deal of uncertainty on the part of consumers as to what they want and what they'll buy for at least the next three years.

"We all may be buying the next Betamaxes and not know it, but it's also an exciting period," Peddie said.