New Zealand is ripe for interactive TV, according to a Silicon Valley-based proponent of the technology.
"I don’t see any reason why New Zealand can’t lead interactive TV in the Asian marketplace," says Phil Vachon of ITV company Liberate.
Vachon, toting a cheque book flush with investors' funds, has been in New Zealand assessing whether ITV can succeed here.
"Most of the companies I talk to here believe the market is too small for us to make significant investment in but I don’t agree. This is a very long-term proposition. Once a viewer gets these services in their home they frequently don’t want to give them up."
He has visited New Zealand twice in the past two months talking to communications network operators but says he hasn’t formed any partnerships yet. He describes the New Zealand market as very exciting and and says he will invest millions of US dollars.
“If you look at the competition between Sky and Telstra/Saturn operation, it seems that they will have to deploy interactive operations and the government is also very interested."
Vachon says the two main indicators of whether interactive TV will fly in a country – bandwidth and the economy - are strong in New Zealand.
“There’s a lot of infrastructure and more broadband than I thought I would find – that’s one of the benchmarks you have to have. And despite what people here say, the economies are good enough to support these kinds of services. People have high percentage of cellphones - that’s a leading indicator. It looks like a market ready to move.”
Vachon says relatively strong loyalty to interactive services helps reduce customer turnover and hence costs. "This helps our operator reduce churn and increase revenue. So we have a great deal of opportunity to sell add-on services over a long period of time to justify the investment.”
Liberate, a company listed on the tech-rich Nasdaq market (market capitalisation $US3 billion) and owned by Oracle, Netscape, America OnLine and Sony, makes the software that runs on ITV servers and set-top boxes.
Liberate is interested in New Zealand as part of expansion to the English-speaking world.
“We started out trying to capture customers in US and English-speaking Europe. There’s no reason why other English-speaking countries with infrastructure can’t move forward."
Vachon says the ITV services that get the most interest and response are online gaming and synchronised broadcasting. Other applications include, banking, e-commerce and e-government.
Last year Liberate took a 10% stake in Ice Interactive, an Australian ITV services company 40% owned by Perth venture capitalist Burdekin Resources (formerly a mining company) and 15% owned by Oracle.
Liberate’s main competitors are Microsoft and Open TV, which runs on the Sky platform.