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The impact of interactive television (iTV) trials on the Australian television industry, 1999-2005.

This article examines the conditions which follow the introduction of first iTV trials in Australia together with technological, business and legal aspects which have determined the proliferation of applications and their commercial feasibility. The word 'impact' in the title of the article has a dual interactive dynamic: it refers to the ways in which iTV applications and services influence incumbent players, but also illuminates how incumbent players shaped the construction of iTV in Australia in the period between 1999 and 2005.

The concept of interactive television (iTV) has existed since the inception of television. From the first telephonoscope in the nineteenth century, through shows such as 'Winky Dink and You' in the 1950s, services such as QUBE in the 1970s and videotex in the 1980s, every decade of television development has been characterised by new iTV trials, high expectations, media hype and, above all, disappointment in the commercial viability of applications and services. The predispositions that invigorate interest in iTV today are related to the rapid exploration of broadband, the digitalisation of the television industry, the convergence of television with the internet and mobile phones but also users' general interest to actively engage with television content and broadcast media.

Therefore iTV is not a new term in Australia, considering that the educational version of satellite, narrowcast iTV designed for use in primary and secondary schools settings has existed since the beginning of the 1990s. However, commercial iTV applications and services have presented a kind of novelty for media practitioners, and, more importantly, for the majority of Australian users, mostly because of the costs of hardware, relatively slow digitalisation and expensive broadband connections, but also due to a lack of education regarding interactive digital services.

Defining iTV is not an easy task. A number of authors (1) state that there has not been a consensus over the definition of iTV and explore reasons for the lack of agreement and the consequences of this. (2) The term 'interactive television' has more of a historical connotation than the precise reference to the actual nature of the media. In general iTV merges computing power, broadcast, mobile technologies and broadband internet, providing users with on demand interactive content. Thus iTV could be defined as 'interactive audiovisual content' (3) which isn't in particular related to any service or platform but is rather mainly related to the 'user's experience that involves at least one user and one or more network devices'. (4)

The article is comprised of three sections. The first section reviews the history of major trials in Australia conducted by payTV providers in the period between 1999 and 2005. The second section investigates positions of commercial and public broadcasters in terms of their general stance on iTV services and investments that they have expressed in iTV applications. The third section is dedicated to a brief description of regulations which influenced the success of the trials.

The conclusion of this article is that the deployment of iTV has been a complicated process influenced by a number of interrelated social issues such as international investments, domestic broadcasting policies and Australian users' cultural needs. (5) The top down structure of a vertically integrated payTV domain, expensive production of iTV applications, slow take-up of digital television supported by anti-competitive broadcast policies, and most of all the absence of a collaboration between providers in the establishment of common infrastructure and rules, caused the collapse of the first iTV trails. In general iTV services were characterised by limited interactivity and controlled closed platforms which did not meet the financial expectations of broadcasters. Instead its role was complementary to the current digital TV packages offered most notably by Foxtel.

iTV TRIALS IN THE 1990s

Despite a modest number of trials, interest for iTV increased in the 1990s, encouraged by increased involvement of the telephone industry (6) and interest of telecommunication companies who perceived it as an investment in their broadband distribution infrastructure and as a cost-effective revenue source. An example of this is 'interactive' realityTV, such as 'Big Brother', which utilised the dual platforms of television and telephone. It has proven to be popular with users and to be a money-spinner for networks, but it offered little real-time interactivity of the sort available through set-top boxes (STBs).

On the other hand, the cable industry needed to rationalise its own TV production and to reinforce narrowcasting. The iTV trials were attempts to fully exploit 'demassification' of the television industry in general, as well as to provide multiple revenues, to win franchises, to draw support from advertisers and to increase the strength of commercial cable broadcasting. In addition, high-speed internet proliferation, potential convergence of industries and in economic terms decreased prices of analogue and digital converters all brought a new sense of optimism for iTV offerings. (7)

In addition, the involvement of US and European satellite companies in the iTV proliferation, (8) together with the rise of interactive applications such as enhanced TV, video on demand and internet over television promised a new era in iTV deployment.

The technological, economic and regulatory 'sea changes' embedded in a liberal economic paradigm (9) were gathering international momentum that was promising modernisation and prosperity of cable, satellite and telecommunication systems with progressive encouragement of private investments and capitalisation of mergers and transnational corporations. The Australian television industry became more intensely influenced by international acquisitions, which as a consequence brought about the introduction of the first iTV trials.

THE AUSTRALIAN STORY

At the end of the 1990s the Australian television industry was experiencing turbulence resulting from the introduction of the payTV sector, wider proliferation of high-speed broadband as well as audience fragmentation and erosion of brand value of television advertisements. In addition, Australian users started embracing new media and content produced and delivered outside of broadcasting schedules, creating a more participatory online environment.

The first trials of iTV were prologues for the commercial launch of iTV services which were supposed to recover their investments, decrease churn (10) and assist payTV providers to successfully compete with free to air (FTA) offers. At the time the advertising industry saw an opportunity to closely target TV users through iTV, delivering more personalised advertisements and providing more accountability for their advertising campaigns.

The following section analyses trials which were conducted on a newly established payTV in the period of 1999--2005 as well as the position of the FTA and public broadcasters in relation to iTV proliferation.

AUSTAR

The first iTV trial was conducted by newly established payTV provider Austar in 1999. In fact, the trial was the venture of its co-owner US cable company United Global Communication (later Liberty Media Corp) who through mergers and acquisitions all around the world invested heavily in video programming and iTV services during the 1990s. But it was also a consequence of Austar's public stakeholders who expected that interactive services would promote their new subscription business.

iTV was a risky investment and an attractive proposition for Austar. Instead of a single 'killer application', there was a subscription-based packaged proposition of mostly enhanced entertainment services which acted as a supplement to the main television program. (11) Supplied with remote control or two-way keyboard services, users were supposed to experience a 'seamless, simple, and contextual' service which would not significantly change their passive viewing habits and would provide them with a choice between whether or not to interact.

In addition, Austar was using its platform to resell other broadcasters' interactive applications. The 'Long Way to the Top--Live in Concert Interactive' was Australia's first iTV documentary and was broadcast through the ABC's services on Austar in 2002.

Still, enhanced programming posed a number of challenges for content providers, including questions concerning the ownership of rights, control over enhancement, and how the costs of enhancing program material could be met. (12) The stand-alone interactive programming, which would include significant content investments and would require a full exploration of media, was far from realisation at the time Austar was conducting the trial.

In summary, Austar expected iTV to contribute to increasing the differentiation of their services, to fueling additional growth in payTV take-up, and to reducing subscription management costs, as users would be able to contact Austar through the television set. Other anticipated benefits were a reduction of churn and incremental revenue from t-commerce (13) and interactive ads. iTV was expected to promote internet access and mobile phone penetration. (14)

The big attraction of Austar's iTV trial was t-commerce services, which were expected to be embodied in TV programs. Users had the ability to interact with sponsors of the channel and to make transactions via an electronic transaction clearing house similar to EFTPOS. (15) However, Austar iTV and t-commerce pointed towards individual applications which were hard to comprehend for Australians who were reluctant to buy expensive TV terminals and invest in unknown services, despite their historical enthusiasm for new technological gadgets. (16) While there was increasing interest in personal services along the line of iTV, this was largely fulfilled by the internet-based services.

From the beginning of the trial, Austar was faced with infrastructure issues, expensive iTV kits, regulatory pitfalls, mostly imported interactive content, and reluctant Australian users. Austar highlighted that penetration of interactive STB into the household will be a critical issue for penetration of iTV in Australia. They invited potential competition to join in and work together on centralised infrastructure which will contribute to all iTV players. However, cooperation requires a policy regime which gives priority to investment and new services. (17) TV providers are mostly occupied with their own business issues, financial resources, regulatory constraints and their relationship with users. For them, cooperation and investment in unknown infrastructure and services can seem to be a risky business.

By 2002 Austar was facing financial challenges. It racked up more than $800 million in losses, until financial restructuring supported by a major American cable investor and a local venture capital firm enabled the company to achieve profitability. (18) All of these factors forced Austar to radically change its iTV strategy and to become mostly the reseller of platform (19) and the subordinate of Foxtel content.

With the emerging strength of the Internet and what had already been learned from the trials, in 2003 Austar, with new ownership, decided that it would be more effective to focus on proprietary services on the internet. Austar's management believed that many of the original objectives of the iTV trial could be more easily met at a lower cost via internet.

OPTUS

Optus's engagement with iTV came as a consequence of its involvement with British telecommunication company Cable and Wireless (C&W). In 1998, C&W moved into the interactive TV market as part of its preparation for digital broadcasting, buying a majority of stakes in the Two Way TV company. Two Way TV produced a range of interactive TV services which later became part of the C&W digital plan. Services included interactive quiz and game shows, live sports applications, interactive banking, shopping and stand-alone games.

During 2000-2001, then C&W Optus spent AU$200 million on an iTV trial which was conducted in 300 households around Australia. (20) Trialing included email, an electronic program guide (EPG), access to the Internet through the TV set, home shopping, near video on demand (NVOD) and games. (21)

However, Optus's engagement with iTV was also a consequence of long-term competition between Telstra and Optus. (22) In order to compete, Optus established Optus Vision TV and Telstra got involved with the Foxtel deal. Since their establishment, Foxtel and Optus have competed heavily in the metropolitan areas, but both were affiliated with Austar in the lower-profit rural areas. Thus iTV trials were supposed to give Optus an advantage over Foxtel, which at the beginning was unable to offer interactivity due to a shareholder dispute (23) and hesitation of Foxtel's half-owner Telstra.

Optus invited a number of companies to participate in an iTV trial, including Coles, Myer, Pizza Hut and the New South Wales Government. Services launched by Optus included interactive gaming, shopping, NVOD, Walled Garden internet sites and mail applications.

Nevertheless, Optus Vision's general belief was that interactive services rather than content would drive subscription growth. Adrian Chamberlain, then Managing Director of the Consumer and Multimedia Unit of Cable and Wireless Optus, said: 'We can say our experience (in the UK) was that being able to work through pieces of equipment you are familiar with in terms of accessing information is very attractive, and that more than content per se is the thing that drives penetration.' (24)

Yet if interactivity is the driver of penetration for iTV services, rather than content, how can we explain the relatively slow take-up of digital television, which is a prerequisite for the penetration of iTV? Why was Optus unable to reduce user churn and to provide increased revenues through iTV? Why did it invest heavily in expensive content deals with Hollywood studios?

Subsequently, expensive digital infrastructure, lack of interoperable standards and STB, as well as an expensive Hollywood content deal, encouraged Optus's owner SingTel to rationalise the Optus business, reach a deal with Foxtel, (25) cancel the trial, and re-focus on broadband. The announcement that Foxtel would purchase Optus Television's National Digital Media Centre assets, including its iTV-related assets, coincided with Optus's cessation of the iTV trial. Yet Network Ten and Network Seven were accusing the deal of creating a 'multiplicity of monopolies', and accusing the companies of writing their own laws to entrench those monopolies. (26)

Nevertheless, the trial highlighted the need for a new skills set and 'cross-skilling' in marketing for a convergent medium such as iTV. (27) Users showed great interest in applications such as NVOD and EPG, mostly followed by t-mail (television mail) and games. 'Soul Mates', a match-making application including EPG and property services, proved surprisingly popular. (28) The survey results confirmed popularity of VOD (video on demand) and EPG (electronic program guide) applications.

FOXTEL

In comparison with Austar and Optus, Foxtel's introduction of the first iTV trials started relatively late--in 2004. This was due mostly to Telstra's reluctance, who did not want Foxtel to offer more than video content, given its investment in separate high-speed internet services. (29) Foxtel's investments in iTV trials were delayed due to being limited by contractual obligations towards its co-owner and by the decision of the Australian Competition and Consumer Commission (ACCC) not to allow Foxtel to upgrade its network to digital until it allowed open access to its network at a non-commercial rate. After the failure of iTV trials of Austar and Optus and an international debacle of t-commerce services, Foxtel continued to have serious concerns about the rolling over of iTV services on its network.

The approval by the ACCC of the Foxtel--Optus deal in 2002 brought iTV closer to the Foxtel domain. In addition, successful interactive advertising campaigns abroad and 'Red button interactivity' encouraged Foxtel to introduce its first iTV services. Foxtel was predicting more than 500,000 digital subscribers by 2005. Although this figure is well short of ten per cent of Australian homes, it is large enough for Australian marketers to start mulling over the concept. (30) For that purpose, Foxtel's sales arm, MCN, set up a new division, MCN Connect, to add databases and direct marketing expertise to interactive TV advertising.

Foxtel's director of digital media, Patrick Delaney, clarified this: 'The migration of interactive services, Foxtel believes, will be from a starting point of using it as a marketing tool to persuade people to upgrade. It will then mature into an anti-churn device, before finally starting to make a small amount of revenue.' (31) So, iTV was perceived as the differentiator between Foxtel and the FTA digital TV offer, not as 'must-have' technology. Therefore iTV did not have a stand-alone business model, but rather it was complementary to their subscription packages and marketing effort to attract subscription. iTV services corresponded with Foxtel's main pay packages and it was a 'tool' for maintaining Foxtel's relationship with community of channels.

The realisation of highly tailored applications such as STB also became difficult because of costs involved in a small market such as Australia. It was collaborative activities with their co-owner News Corporation that brought these services to the Australian market. In general Foxtel has features similar to Sky Digital in the UK, including EPG, iQ, Red Button Active and remote control. (32) Sky Digital has been involved with several interactive services since 1998 including Sky Sports Extra, which allowed viewers access to instant replays, match statistics and highlights, and interactive shopping channel. Many of Foxtel's interactive applications were created using templates across various channels and graphical prototyping models from BSkyB. (33)

Yet the focus of Foxtel was on enhanced iTV services and mostly on repurposed entertaining content. (34) One example was Foxtel's NVOD which in comparison with TransACT company's true video on demand (TVOD) was not a true interactive application. Some people describe NVOD as 'just pay TV but with more frequent showings'. (35)

In 2001, the Australian Federal Government ratified the prohibition of interactive gambling, applying it to people in Australia, with the exception of wagering services and interactive games. (36) It opened the door for Foxtel to make an agreement with the UK's Two Way TV company and Tabcorp Holdings Limited and to jointly offer a payTV wagering service, including a number of betting types, such as sport betting applications. (37) All of these services assisted Foxtel in strengthening its value proposition and competing successfully with commercial and public providers.

In general, other providers of digital services were not able to compete with Foxtel in the provision of interactive services. For example, the FTA could not broadcast interactive services because of a lack of STBs and return path infrastructure. Other iTV providers were very small or operated in too limited a market to seriously jeopardise Foxtel's and Telstra's assets. (38)

In the long term, Foxtel's dominance of the market did not benefit competition and end users because it did not allow access seekers to supply stand-alone interactive services or to add interactive features to any of the existing channels. Rather, anyone wishing to supply interactive services had to acquire capacity from Foxtel (and carriage from Telstra and Optus) for an entirely new pay TV channel, which was could then have interactive features added to it. (39)

Nevertheless, the costs of production and delivery of iTV applications for Foxtel were serious obstacles to the proliferation of digital interactive services. In comparison with television production of interactive applications, online interactive production is a cheap option, but it does not always offer high quality programs. The aim is to find a balance between flexibility, which the web offers, and the high quality of television video production; this has been a complicated task.

In summary, by 2005 all pay TV providers conducted their first iTV trials. The biggest payTV provider, Foxtel, became the dominant provider of interactive applications. The competition was defeated by Foxtel's cooperative activities with Sky Digital, opponents' lack of financial resources, inappropriate infrastructure and lack of affordable STBs and standards. All these obstacles allowed Foxtel to exercise a monopoly, and through market manoeuvres it forced Austar and Optus to become only resellers of its platform and content. Despite its monopoly, Foxtel's iTV applications were constrained by a number of factors such as costs, slow adoption of digital TV and in general low subscription to payTV. Foxtel's iTV offer was only corresponding to Foxtel's main subscription packages and their general TV strategy based on entertainment, imported shows and movie blockbusters.

On the other hand, the FTA and the public broadcasters did not carry out iTV trials, but they have been engaged with interactive applications in a financially less demanding manner and from a different perspective to payTV providers. The following sections discuss commercial and public broadcasters' approach to iTV.

FTA COMMERCIAL BROADCASTERS

While payTV operators were steadily active in the development of trials and applications, the commercial TV providers were much quieter on the iTV front. It seemed for a long time that commercial broadcasters and iTV were 'uncomfortable partners'. Since early 2000, media industry doyen Harold Mitchell had dismissed talk about iTV becoming a reality in Australia, saying existing commercial media did not want it. (40) It was a view echoed by Foxtel director of corporate affairs Mark Furness, who also said that FTA achievements in iTV and digital were insufficient, despite FTA channels being 'given' the spectrum and protection from competition: 'For them it's all about protecting the old model of TV, retaining advertising revenues. Their credibility on digital is not much, because they haven't done much.' (41)

Indeed the main anxieties for commercial channels in this regard were the low impact of digital TV since its launch in 1998, the issue between pay TV and FTA channels of proprietary versus 'open market' delivery platforms, and fear that digital technologies would jeopardise commercial FTA's protected regulatory position. These were complex issues, further complicated in the beginning of the 2000s by the delays digital TV experienced with MHP standards, low set-top box penetration, costs of making applications and low consumer take-up of digital. These factors affected the relationship with potential advertisers who were not willing to commit to sizable investment unless commercial channels could see a sizable audience drawn to iTV. (42) As a consequence, FTA was not encouraged to invest in new services.

Yet it would be wrong to assume that FTA was not completely involved with some of the trials of payTV providers. In 2001, Channel 7 teamed up with Optus and other providers such as ICE Interactive for the Tri-Nations Rugby Union iTV project, in which participants had access to statistics and updates on-screen while they watched rugby games. However, larger involvement by FTA broadcasters meant carrying out iTV services on the Foxtel digital platform, which would have been an additional expense and not always a secure profit return. In this case their own platform would be outdated and their financial situation difficult, which would force them sooner or later to outsource to Telstra. (43) So, their thinking was: 'why invest in interactive programmes that are going to make [our] pay TV rivals look really good and land a bill for the privilege?' (44)

In the beginning of 2000, the growth of internet services continued blurring the distinction between television and computers. It forced commercial broadcasters to join the digital race and invest in online and SMS services. (45)

PUBLIC SERVICE BROADCASTERS (PSBs)

In comparison with the time when public broadcasters in Australia were more readily accepted as national institutions and could rely on relatively stable funding, the last two decades of the twentieth century brought a more radical shift towards a multi-channel environment, an explosion of new delivery systems and an extensive program of efficiency reforms which challenged the original role and mission of the ABC and the SBS. (46) To meet the challenges of the globalisation of media markets, public broadcasters were encouraged to be ambitious and imaginative in the process of full digitalisation, which would reinforce their core values as 'guardians of diversity, quality and public sphere', (47) while at the same time they were expected to speak the language of competition and new technologies, and to recite the mantra of choice and individual freedom. (48) As a consequence, ABC and SBS started to active search for strategies which would allow them to redefine their public role but would also assist them to survive in a commercially dominant digital environment.

In summary, the significance of iTV for Australian public broadcasters lay in its ability to complement broadcast programs and to provide new ways of communicating with audiences. iTV trials were also an opportunity for PSBs to remain up-to-date with the demands of a new media environment. iTV applications were potentially an opportunity for PSBs to renew their charters and to validate public expectations.

The PSBs has always been 'and remains so even in these days of serious funding constraints--a space of experimentation and innovation in the television form. It has acted almost as a research and development unit for television as a whole'. (49) Thus iTV offers a variety of possibilities for trials of numerous applications, it enhances the content of public broadcasters and it is in a position to encourage innovation in the Australian population, allowing engagement with the audience on a variety of levels.

Thus, participating interactively has been a part of PSB strategy to leverage its brand identity and audience loyalty across different media, platforms and applications. Talking about ABC plans regarding digitalisation and iTV at a seminar held in Sydney in 2001, ABC's head of multi-channel television, Ian Carroll, said that one of the ABC's strategies is 'building iTV capabilities, models, skills and cultures that will enable [them] to participate interactively on any platform and to serve all Australians'. Thus iTV applications could potentially secure 'high ratings' and provide additional revenue. Still, this opportunity has been blocked with a traditionally restricted budget of PSBs, regulatory obstructions as well as the iTV applications price tag.

In general, the most attractive 'tool' of PSB in the digital era was its content, which is re-packaged in different channels and platforms. This promised to be a profitable revenue stream. Then ABC Interactive Media head Chris Winter said in 2001 that 'one of the ABC's great strengths is its intellectual capital, if you want to call it that ... there's great interest in selling or licensing our content, be it news or other sorts of program material, and so on, to other broadcasters possibly, or to other online platforms to make some money, to bring some money back in ... So that's certainly an aspect of the interest in interactivity.' (50) For example, the audience activities enabled in interactive multi-platform formats include voting by phone, as well as TV programs such as 'Catalyst', 'The New Inventors' and 'Sleek Geeks' (ABC), chatting by text messaging, learning through additional websites such as Online Open Day (ABC), and contributing with information through a website, such as Tales from a Suitcase (SBS).

However, the absence of cheap and more functional set-top boxes, constrained digital legislations, limited bandwidth, increased operating costs for an already budget-restricted PSB, high investments in equipment, audience churn, government reluctance to encourage digitalisation of the terrestrial platform, delay of the multimedia home platform (MHP) standard, and existence of more advanced competition all made the price too high. Instead, iTV applications became part of PSB's multiple platforms strategies or content broadcast using Foxtel or Austar digital platforms. Despite problems, PSBs have made some of the most creative interactive programs, prioritising local content and appealing most to the digital technology savvy population--a young generation of users.

Generally, there was a difference between the FTA broadcasters and pay TV and public service broadcasters in their overarching attitude towards iTV: pay operators regarded iTV as an add-on to existing programming and advertising, while commercial broadcasters saw it as a challenge to their business models. However, FTA broadcasters could not stand behind competition. They became the main television providers of less expensive forms of enhanced interactivity, such as SMS, which had proven to be popular with users and to be money-spinners for networks, but offered little real-time interactivity of the sort available through STBs. In the middle there were public service broadcasters who showed genuine interest in iTV services but were constrained mostly by their budget as well as by a number of regulatory and technological issues.

In addition, the introduction of the first iTV trials occurred concurrently with the introduction of the first digital TV legislation (51) and its first revisions, which influenced the deployment of iTV in a direct way. The first digital television legislation brought restrictions on multi-channeling and new players, biased anti-siphoning rules, concentrated media ownership, constrained datacasting regulations and limited access to broadband technologies, (52) and as a consequence it discouraged commercialisation of iTV trials and caused their cancellation. The government decided to preserve the status quo and continue protecting FTA broadcasters and Telstra, instead of looking at the needs of users who started downloading TV content and creating their own content beyond corporate business models.

CONCLUSION

Supported by its partnership with one of the biggest iTV providers in the European Union, News Corporation, and partly owned by the biggest telecommunication provider, Telstra, by 2005, Foxtel became the leader in the Australian iTV market. By political and financial manoeuvres it eliminated competition, so that other pay TV providers became simply resellers of the Foxtel platform and services. Commercial broadcasters took a minimalistic risk, providing enhanced interactive services, such as SMS, in the hope that with small investments they could introduce interactivity and be competitive on the market. Public broadcasters lacked resources and government support, causing iTV to be only an experiment which brought local content in predominantly foreign-based iTV applications.

By 2005 there was no business model or direct revenue from iTV applications. In the meantime, high-speed internet had started to deliver what iTV had once promised to do. A participatory model of interactivity embedded in production of inexpensive content, flexibly distributed to audience through different platforms and media devices, it has challenged iTV's corporate-driven model of television. The internet has challenged broadcasting offers and has provided opportunities for delivery of true interactive applications such as EPG and TVOD. It has empowered users to become producers of audio and video material which can be remixed and shared with online communities around the globe.

However, it would be wrong to assume that iTV has been a complete fiasco. Theoretically, the discussion should be much more open and diverse. A relative failure of broadcast models does not mean the collapse of the whole idea of iTV. Recent federal government investments in the National Broadband Network and HSB (high speed broadband), as well as advances in online video technology, initiated hope that we may be heading towards a time when iTV and internet television are exchangeable concepts, competition and diversity of services and applications are less constrained, and users have opportunities to be more interactive than ever before with their television devices.

All of this refers to potential development of IPTV (internet protocol television), which means delivery of iTV over broadband data networks using the same basic protocols that support the internet. IPTV has the potential to provide a range of hybrid broadband and broadcast applications as well as stand-alone and add-ons, interactive services which users can view 'wherever, whenever, however' they like. IPTV is again an expensive venture, so before any hype hits the market, it is crucial to investigate whether this technology has feasible business models and realistic chances to survive in the Australian media environment.

ENDNOTES

(1) For example, see Sheizaf Rafaeli, 'Interactivity: From new media to communication', in Robert P Hawkins, John M Wiemann and Suzanne Pingree (eds), Advancing Communication Science: Merging Mass and Interpersonal Processes, SAGE, Newbury Park, CA, 1988; Jonathan Steuer, 'Defining virtual reality: Dimensions determining telepresence', in Frank Biocca and Mark R Levy (eds), Communication in the Age of Virtual Reality, Lawrence Erlbaum, Hillsdale, NY, 1995; John Carey, '"Winky Dink" to "Stargazer": Five decades of interactive television', UnivEd Conference on Interactive Television, Edinburgh, Scotland, 1997; Jens F Jensen and Cathy Toscan, Interactive Television: TV of the Future or the Future of TV?, Aalborg University Press, Aalborg, 1999; James Stewart, 'Interactive digital TV in the UK', 2000, www.rcss.ed.ac.uk. Accessed 12 May 2006; Celia Quico, 'Interactive television--A new media industry in Portugal: Analysis of the current and future development of products and services', Masters thesis, http://www.bocc.uff.br/pag/ quico-celia-tvinteractiva.pdf. Accessed 12 March, 2008.; Jan AGM van Dijk and Loes De Vos, 'Searching for the holy grail: Images of interactive television', New Media and Society, vol.3, no.4, 2001, 443-65; Pyungho Kim and Harmeet Sawhney, 'A machine-like new medium--Theoretical examination of interactive TV', New Media & Society, vol.24, no.2, 2002, 217-33.

(2) For example see John Carey, 'The interactive television puzzle', 1994 (no longer available on the internet); Hernan Galperin and Francois Barr, 'The regulation of interactive television in the United States and the European Union', Federal Communications Law Journal, vol.55, 2002; Kim and Sawhney; Konstantinos Chorianopoulos and George Lekakos, 'Methods and applications in interactive broadcasting', Journal of Virtual Reality and Broadcasting, vol.4, no.19, 2007, 312-316.

(3) Scott McQuire, personal communication, Melbourne, 2009.

(4) Chorianopoulos and Lekakos; George Lekakos, Konstantinos Chorianopoulos and Georgios Doukidis, Interactive Digital Television: Technologies and Applications, IGA Publishing, Hershey, PA, 2008.

(5) Raymond Williams discussed the ways in which uni-directional and twoway radio and television development were governed by cultural needs and specific governmental policy and discussion making. Raymond Williams, 'The technology and the society', in Tony Bennett (ed.), Popular Fiction: Technology, Ideology, Production, Reading, Routledge, London, 1990, 9-22.

(6) Telephone is cheaper as return path than cable.

(7) See Einev, I Want my iTV: Content, Demand and Social Implications of Interactive Television, Columbia University, New York, PhD Thesis, 2004.

(8) For example DirectTV and Echostar.

(9) Thus globalisation and deregulations of broadcasting and telecommunication industries, together with international investments, influenced Australian providers to introduce iTV applications and services in Australia.

(10) Churn represents the loss of subscribers who switch from one carrier to another (see Michael C Mozer, Richard Wolniewicz, David B Grimes, Eric Johnson and Howard Kaushansky, 'Churn reduction in the wireless industry', in Sara A Solla, Todd K Leen and Klaus-Robert Muller, (eds), Advances in Neural Information Processing Systems 12, MIT Press, Cambridge, MA, 2000, 935-41.

(11) In 1999 Austar started offering 'soft' iTV services which caused modest increases in production costs, such as weather and news. The trial also included the trailing of EPG and a game channel which provided oneway interactivity (Marion Jacka, Broadband Media in Australia: Interactive Television (ITV)--Tales from the Frontier, Australian Film Commission & Creative Industries Research and Applications Centre and Australian Key Centre for Cultural and Media Policy, Sydney and Brisbane, 2001). After a deal with Oracle for provision of Austar's interactive TV platform they started the trailing of email, advertising, more games, banking and eventually sport. In addition, generic enhancement to all of the programs was added to music Channel V and Lifestyle Channel provided by the XYZ company, which was partly owned by both Austar and Foxtel. Basically Austar supplied enhanced services and two-way interactive enhancements to its satellite subscribers.

(12) Jacka, Broadband.

(13) 'T-commerce', or 'television commerce', is e-commerce undertaken on digital television (see A Diana, 'E-commerce vs. T-commerce: who will buy?' E-Business Special Report, 2008, http://www.ecommercetimes.com/story/31435.html. Accessed 12 June 2009.).

(14) Jane Schulze, 'Interactive TV trial expands', The Australian, 9 November 2001.

(15) N Hopkins, 'Austar lobbies rivals for wider beam', The Australian, 16 September 1999.

(16) See Michael Rose, Claire Dormann, Henning Olesen, Berco Beute and Jens F Jensen, 'White paper on interactive TV', Danmarks Tekniske Universitet, 1999.

(17) See Chris Jenkins, 'Optus iTV to linger in limbo', IT News, 13 November 2002, http://www.itnews.com.au/storycontent.cfm?ID=12&Art_ID=11260. Accessed 15 May, 2008.

(18) Colin Kruger, 'Austar packs up its troubles', Sydney Morning Herald, 31 May 2003, http://www.smh.com.au/articles/2003/05/30/1054177725328. html. Accessed 23 May, 2007

(19) 'Platform' is a business package or strategy.

(20) In November 2001 trail included 3000 households and Optus started charging for services.

(21) Finola Burke, 'Optus goes for interactive TV', The Australian, 11 August 2000.

(22) Optus and Telstra had very costly rivalry in the mid-1990s when they built pay TV cable networks side by side. Their competition almost destroyed Optus (see Trevor Barr, Newmedia.com.au: The Changing Face of Australia's Media and Communications, Allen & Unwin, St Leonards, 2000.)

(23) The discontent at News Limited and Publishing & Broadcasting over Foxtel arose for the most part from the deadlock over how to squeeze more out of Telstra's cables as the partnership moved into an era of high-speed, content-rich, interactive media. The three could not agree on what to pump down the cable to Foxtel's half-a-million subscribers, who pays for access to the pipe and who gets which part of the revenues (see Hopkins).

(24) Jane Schulze, 'Interactive TV key to beating Foxtel, says Optus', The Australian, 19 June 2001.

(25) For more about the Foxtel/Optus deal, see Jenni Lloyd, 'The National Geographic Channel--Enhancing the experience', European Conference on Interactive Television: Enhancing the Experience, Brighton, UK, 2004, http://www.csd.abdn.ac.uk/~jmasthof/EuroITV04/S03.pdf. Accessed 30 June 2009.; Douglas Ross Kelso, Open Access to Next Generation Broadband, Queensland University of Technology, Brisbane, PhD thesis, 2008, http://eprints.qut.edu.au/16612/. Accessed 12 January 2008.

(26) Jane Schulze, 'Optus in $200111 punt on iTV trial', The Australian, 29 May 2001.

(27) See Liza Norris, 'Interactive TV and datacasting: How to make it happen?', in Sarah Barns (ed.), Network Insight, St Leonards, 2002, 27.

(28) Many companies also showed interest for iTV trials, including FTA providers. For example, Channel Ten was interested in the trials because it could assist the rollout of digital TV; Harvey Norman was also interested in trial, but not committed due to the cost of reconfiguring websites for TV. After handling Australia's first credit card transaction through the TV in ICE Interactive trial in Orange, Mastercard also became one of the potential participants. The f2 and the Fairfax Interactive Network joined the interactive television trial conducted by Optus. f2 provided content from its domain.com.au real estate classified site. For many of them, iTV was the next milestone in digital convergence and an attractive proposition across the widest range of platforms, including publishing, the internet and television.

(29) 'Canberra news' in Jacka, Broadband.

(30) Paul McIntyre, 'Seven to freeze rates, slash Sunday night ads', Sydney Morning Herald, 18 November 2004.

(31) Sean Hargrave, 'Foxtel takes the upper hand down under', New Media Age, vol.2, no.3, 2004, 12-4.

(32) Stephen Bartholomeusz, 'Foxtel-Optus deal set for the wringer', Sydney Morning Herald, 17 September 2002, http://www.smh.com.au/articles/2002/09/17/1032054769273.html. Accessed 12 January 2008.

(33) Foxtel, http://tripatlas.com/Foxtel. Accessed 22 May 2010.

(34) By 2006 Foxtel offered over 100 channels and easy-to-use interactivity: interactive sports--Rugby League, AFL, Rugby Union, Basketball, Cricket, 2006 Commonwealth Games and award winning Australian Open application that allowed subscribers to choose from a number of simultaneous games; on demand news; a fully integrated personal video recorder called the FOXTEL iQ; NVOD movies--VOD coming this year via FOXTEL iQ; interactive games; voting; and Australia's only integrated electronic programming (Conference Speech by FOXTEL CEO Kim Williams, 2006).

(35) Z Jovanovic, '...just pay TV but with more frequent showings', personal communication, Belgrade, Serbia, 25 April 2009.

(36) Elizabeth Jacka, 'Digital spaces, public places', Southern Review, vol.35, no.1, 2002, 1-8.

(37) Jacka,'Digital spaces'.

(38) Maybe one significant provider worthy of mention is TransACT, which operates as a fully interactive, high-speed digital TV platform. However, in 2006 it had only around 13,000 subscribing homes in the ACT and Queanbeyan, and was not available outside these areas (for more about TransACT see Mariel Beros, VOD: A false dawn?, RMIT, Master of Communication thesis, 2004; Kelso).

(39) See Two Way Ltd Submission to Australian Competition & Consumer Commission: Foxtel Special Access Undertaking, 2006.

(40) Danielle Veldre, 'ITV is not our future', 2003, http://www.bandt.com/au/ news/de/Oc146de.asp. Accessed 4 April 2009.

(41) Kate Lyons, 'Static clouds the future of iTV', Newsweek, vol.12, 2001, 12.

(42) Actually there were no interactive FTA advertisers until 2004 because there was no real platform, and that's because there is no audience in terms of technology penetration.

(43) Paul Budde, 'Australia--digital TV--interactive TV, set-top boxes & EPGs', Paul Budde Communication, 2009.

(44) Justin Hewelt, co-founder of Broadband Bananas in Hargrave.

(45) For example, Kerry Packer's Nine Corporation made a deal with Microsoft to start providing 'portal ninemsn which became a new kind of interactive TV business' (Jane Schulze, 'Two-way TV--Will digital television turn you on?--TV's zero hour', The Australian, 7 February 2002). Network Ten pioneered the SMS-based interactive model with its Big Brother show.

(46) See Barr, 'Newsmedia' in Stuart Cunningham and Graeme Turner (eds), The Media & Communication in Australia, Allen & Unwin, Crows Nest, NSW, 2001.

(47) Jacka, Broadband, 59

(48) Cinzia Padovani and Michael Tracey, 'Report on the conditions of public service broadcasting', Television and New Media, vol.4, no.131, 2003, 6.

(49) Jacka, Broadband, 64.

(50) Interactive TV, Media Report, ABC Radio National, 16 August 2001.

(51) See Jane Forster and Caroline Lovell, 'Sorting out the bits--Digital television and datacasting in Australia: A study in policy and regulatory development', International Journal of Communications Law and Policy,vol.6, 2000/01; Jock Given, Turning Off the Television: Broadcasting Uncertain Future, University of New South Wales Press, Sydney, 2003; Jason Bosland, 'Digital television and multichannelling: Changes under the broadcasting legislation amendment (digital television)', Melbourne Law School--Legal Studies Research Paper, 2006, 258.

(52) See Franco Papandrea, 'Broadcasting planning and entrenched protection of incumbent broadcasters', IPA Policy Paper 2000/1, IoP Affairs, Melbourne; Franco Papandrea, 'Digital television policy: A squandered opportunity', Agenda, vol.8, no.1, 2001, 65-78; Franco Papandrea, 'Digital three-card trick', The Institute of Public Affairs Review, vol.52, no.1, 2000, 12-3; Franco Papandrea, 'Fiddling with the digital TV tuner: Recent adjustments to a poor policy', Agenda, vol.16, no.3, 2009,115-134; Forster and Lovell; Given; Bosland.

Maria Jakovljevic

School of Culture and Communication
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