Silicon chips making that possible have already been built into 2 million TV sets, as part of the Guide Plus on-screen program guide. AtTV Media already is selling ads to broadcast and cable networks and consumer marketers that want their ads seen no matter what channel a viewer eventually decides to watch.
"From the first time I saw it, I just knew this was going to be a very important part of the marketing future for television," said George Schweitzer, exec VP-marketing and communications for CBS.
"I actually think this will probably be the most valuable real estate on the television set," said Alan Gould, senior VP at investment company Gerard Klauer Mattison & Co.
Here's how it works: About two-thirds of the screen is an interactive TV listings grid. The remaining third of the screen, on the left, is divided into three parts. One is video from the last channel viewed. The other two are ad billboards.
In addition to tune-in ads from broadcast and cable networks, AtTV is selling ads to consumer marketers including Domino's Pizza, Blockbuster and 1-800-Flowers.
Ads can be targeted so products may be offered to viewers based on their ZIP codes. Or offers can be made to viewers watching sports or a soap opera, said Jesse London, AtTV's VP-sales and marketing. AtTV has strong e-commerce possibilities as well.
Mr. Gould estimated AtTV will reach ad revenue of $2 million this year and projected it will grow exponentially, as the number of Guide Plus sets increases, to $25 million next year. In 2002, he projects revenue of $250 million, rivaling UPN. In five years, revenue could hit $4 billion, the analyst said, approaching the big broadcast networks.
`ZAPPING' NO LONGER NEEDED
AtTV Media is a joint venture between Gemstar International Group (which also created VCR Plus and recently bought TV Guide), Thomson Consumer Electronics (which markets TV sets under the RCA, Proscan and GE brands) and NBC.
John Healy and Bruce Maggin, two executives who helped ABC get into other media ventures, including ESPN, Lifetime Television and A&E Network, created AtTV Media.
"This was as large an opportunity as we'd ever seen before," Mr. Healy said.
Because one part of the guide shows video from the last channel watched, viewers won't miss their show while the guide page is up.
"It eliminates the need for zapping," said AtTV's Mr. London.
The guide is interactive. Using a remote control, viewers can set their TV to turn on or tape a show either from the listings or the guide's ads. They can also search out shows by genre or call up special news services.
Gemstar has patents for the system storing program information at the TV set and one-touch commands to watch or tape shows.
"These are interactive ads at the point of purchase," Mr. London said.
`THEY NEED TO GET SOME RATINGS'
Ad buyer Aaron Cohen, exec VP-marketing at Horizon Media, said when Guide Plus is in a significant number of homes, it will have "an extraordinary ability to reach a reminder audience the night of a telecast within a reasonable time before the telecast begins."
Mr. Gould said his revenue projections for AtTV were based on a $10 CPM for ads. CBS' Mr. Schweitzer acknowledged Guide Plus advertising is expensive.
"Nothing is cheap, and they're going to bring in a lot of sophisticated technology," he said.
Mike Mohamed, VP-marketing and on-air promotions at A&E, objected to AtTV basing its prices on the number of sets sold.
"I think it has great promise. It needs time to be tested. They need to get some ratings," he said.
Mr. Lafayette is national editor of Electronic Media.