Viewers will offset their cable TV bills by using advertiser rebates, incentives or electronic coupons, Mr. Schena believes.
Mr. Schena, president of FutureVision of America Corp., West Conshohocken, Pa., has been meeting for months with local businesses and organizations in eastern New Jersey, hoping to convince them to advertise on the interactive TV system Bell Atlantic Corp. plans to test in Toms River, N.J., a small town about 45 minutes south of New York.
The pitch: Companies equipped with a computer and modem can send an interactive message to targeted homes for under $100 per month. The system operator will monitor every participating home to identify its viewing patterns, and then FutureVision can provide the data to advertisers.
"Right now, we only know information about the household, and it won't be long before you'll be able to know about the watcher," Mr. Schena said. "But now we have a two-way communications network. We can insert [advertising] any time anybody wants it. We can go to any business in town and let them promote directly on an address basis to you."
FutureVision will test the system with local advertisers before looking to sign national marketers, Mr. Schena said. While the price of admission is expected to remain flat at first, the company may charge on a per-home or per-transaction basis in the future.
Mr. Schena declined to identify which advertisers FutureVision has met with or whether there are any signed contracts. He concedes advertisers may be hesitating because Federal Communications Commission approval for the project is still pending.
The FCC has been considering the regulatory case for 16 months, and no bets are being placed on when approval might come.
In the meantime, FutureVision and Bell Atlantic are wiring homes at the rate of 1,000 per month for a current total of 8,000. When FCC approval comes, the interactive service will be available to as many homes as are wired.
The network could also be extended to schools, libraries and businesses.
The first programming will be existing cable services-at prices lower than currently charged by competitor Adelphia Communications Corp.
Advertisers will be able to insert interactive spots into broadcast shows or use an interactive "overlay" to add a viewer response element.
A sample interactive commercial describes a hypothetical travel agency and asks the viewer if he would like more information. If so, a menu of choices begins with destinations, then proceeds to type of vacation. Each screen offers more detailed information on airfare, hotels and car rentals.
The spot also includes an interactive contest. Viewers who answer a multiple-choice question correctly can receive a special discount or promotion.
The system also offers viewers the ability to pause or store interactive commercials and come back to them later.
FutureVision will not offer full-motion video at first, Mr. Schena said, citing the expense of setting up video servers and other hardware.
The video-on-demand issue has kept some marketers watching interactive TV from a distance, said Cheryl Snyder, FutureVision's marketing and sales director.
"For the most part, advertisers are waiting for video-on-demand trials," Ms. Snyder said. "In addition, they have to worry about the platform-ad agencies have been convinced by Time Warner and Viacom that full-motion video is the only thing going."
Those companies are promoting full-motion because they have libraries of material that could be used in such a system. FutureVision's program is "a logical first step," she added.
It will take time for operators and advertisers to decide the best applications for interactive media, said Wes Dubin, senior VP for electronic ventures at DDB Needham Worldwide, Chicago. Mr. Dubin has seen FutureVision's efforts, but isn't ready to declare whether it will attract advertisers.
"We plan to examine and look at all sorts of interactive entrants, whether they're wireless, cable interactive, computer-based," he said. "I don't think we know enough yet about what the consuming public wants from interactive; there's a lot to learn yet. The wider the variety of testing opportunities the better."