INTERACTIVE TV: Press the money button - Sky News Interactive's Steve Bennedik tells Charles Arthur how the service has become a real money-spinner through its innovative approach to iTV

Steve Bennedik has had a busy morning. Brazil has just beaten England in the World Cup and while businesses across the land paused to watch the game, his office was buzzing with activity.

Sky News Active pumps out eight screens of coverage, and Bennedik's team also looks after the Sky News web site - the two combined are known as Sky News Interactive. Today, post-match coverage continues with a TV text chat between the editor of Haymarket title Four Four Two and Sky News viewers.

While Bennedik, who is head of Sky News Interactive, is quick to point out that Sky Sport had interactive data before Sky News, it is the latter that has been the most visible to users. Seventy per cent of digital customers have used the interactive side of the service; for a company with five million paying subscribers, that means 3.5 million users.

The trouble with making interactive TV pay has been that viewers use it for enhanced content, but not to buy things, as BSkyB and BT discovered with Open (see panel, p24). But it's not a problem for Bennedik. Sky News Active is not directly intended to be a money-earner, but there are links to pull viewers towards revenue generators, notably betting and online voting.

One service allows viewers to vote on issues of the day for 25p through a premium-rate phone line. When John Prescott landed his infamous two jabs on a tormentor during the 2001 election campaign, Sky put up a voting form asking whether he was right to hit out. Some 40,000 viewers pressed the button to vote - bringing in £10,000. "It's true interaction and it captures the imagination of the viewer, says Bennedik.

Two Way TV, an interactive TV company, has been pushing the idea of second-guessing quiz contestants since 1995. What's different for Sky is that it has the platform and number of users to make it work. The technology is entirely the broadcaster's. "It came from OpenTV. It was designed and built in June 2000, the year after Sky Sport got its interactive side, says Bennedik. "We already had the in-house experts and publication system. The delivery was based on the same system Sky Sport had."

To bring up the Sky News Active screen, viewers need only click the red button on their digital TV handset while watching an interactive-enabled channel. The sound from the main screen continues, while a menu of eight live feeds appears, covering news, sports, weather, business, celebrity gossip and timely alternatives.

The live picture expands to take up a quarter-screen in the top right of the screen, with menus on the left and below it. The pictures could be bigger, but that would require more bandwidth, which is expensive.

The eight screens use far less data than a full channel would, making it affordable, when eight channels on their own - or even one - would not be.

The system Sky uses is OpenTV's Streamer, which can transmit multiple streams in real time, and is supported by in-house publishing systems.

Ralph Brookfield, BSkyB's enhanced TV manager, says: "The system is flexible so that if we want to show a video feed from our sister channel Fox in the US, we can. Or if there is a live press conference, you can follow it while another news item is being shown on the main screen."

It also makes it easy to route the pictures from outside broadcast systems - such as those following the Queen Mother's funeral - through to the interactive side. The quarter-screen picture leaves room for menus and interaction on the rest of the TV screen. But what does it offer that people couldn't get before?

"With the eight windows, we're trying to give people choice. With a standard TV broadcast, you get one picture and all the others are lost. With this, we offer people more control, explains Brookfield. "There is no need to pick up a phone, turn on a PC or switch out of a TV show to access a service or feature."

The route to the service that is now available hasn't been easy. When the BBC launched its interactive service BBCi via Sky in March 2001, it was delayed for 18 months while the two sides argued about the BBC's liability if BBCi caused Sky boxes to crash. And brightBlue, Energis Interactive's shopping portal through the Sky platform, went into liquidation last month.

Its launch last November was delayed while Sky tested the system's compatibility with set-top boxes - the broadcaster already complies with up to 15 different set-top box standards.

The sad demise of ITV Digital has also proved an annoyance, if not a setback. "As a news provider, we're interested in taking our content to as many platforms as possible, even 3G, as well as digital terrestrial and cable, says Bennedik.

Sky News Active is looking to extend its capabilities further in the near future with the launch of moderated chatrooms linked to the news channel. Sky News has partnered with interactive TV company YooMedia to create TV chat, which is currently being tested with a moderated 'question and answer'-style forum every Friday morning.

Experts are brought into the Sky News interactive studio to chat with viewers, and the red text in the corner of the screen reads 'chat' while the session is in progress. Viewers can access the chat through the interactive menu; once launched, the main television broadcast continues in a quarter frame with chat text running across the rest of the screen.

Viewers can contribute to the discussion by keying their message into the Sky digital remote handset or through their infra-red keyboard, at a cost of 5p a minute. Viewers' input is filtered through YooMedia before it gets to Sky, so swearwords and irrelevant comments are removed. The remaining comments are then filtered through a team at Sky News, which chooses the best and forwards them to the expert. "I'd like to see the chat become more free-flowing, says Bennedik. "But at the moment we are just at the trial stage."

Viewers can also follow the chat online - integration between web and iTV is a cornerstone of Sky News' interactive policy. "We're trying to deliver on this relationship between the internet and News Active, but it is quite difficult, says Bennedik. "There's not just the design issues, but how to get video and display it properly on the net. Sky provided streaming video of the Queen Mother's funeral, which Bennedik says "looked great", but he acknowledges that that is not the norm.

Which is why both Bennedik and his opposite number at the BBC, John Angeli, believe there is great cross-over potential for interactive TV to supply content for broadband users. "The sports round-up is always available on broadband and on the Sport Online web site, says Angeli. "And when we streamed the Queen Mother's funeral, we had 170,000 streams going."

Interactive services also give TV firms a chance to cement their relationship with their viewers. "Normally we say goodbye to them at about 9am, when they head off to work, and then say hello again around 6pm, when they get home, says Angeli. "The trick is to get them to pick up the daytime news online."

Bennedik shares that sort of thinking, and looking forward, notes that now Sky News Active has built awareness of its brand, it is in a position to create even more value for Sky. "We're always looking at ideas that generate revenue, he concludes. "As long as they don't compromise our service."

SKY ACTIVE LET OPEN ADVERTISERS UPGRADE THEIR OFFERING

In October 1999, BSkyB launched Open in partnership with BT to provide interactivity via a wireless keyboard linked to a TV, using a phone line to shop online.

Open signed up a number of partners, including HSBC, Dixons, Woolworths and Argos. But critics noted that it only gave viewers access to the net if they stopped watching TV.

Furthermore, screens took up to a minute to load and the system was prone to crash. It was also expensive to appear on the platform: up to £1 million a year in two-year lock-in contracts.

In its first year, only six per cent of subscribers used it to buy anything, and Open was closed as a separate service in May 2001. It became part of Sky Active's services, where Open's partners continue to have a presence.

Sky Active is promoted by L'il Red, a spiky-haired character designed to get people to press the red button.

Local resource UpMyStreet claimed to be the first Open partner to redesign its service to take advantage of Sky's browser technology. It now offers direct access to specific services, automatic postcode recognition and a faster response time.

Tony Blin-Stoyle, managing director of UpMyStreet, says: "Not only does the technology provide an improved front end to Sky Active subscribers, it also allows us to easily develop products and improve our services."

THE BBC RESPONDS TO VIEWERS' DEMANDS FOR CONTENT

The BBC has its own interactive news service, which resembles Sky's quite closely - largely because what people want is much the same: news headlines, weather bulletins, sport and a couple of other services - usually feeds of major news items such as the Budget.

It offers five screens, compared with Sky's eight. The biggest barrier is bandwidth. "It costs more to have more screens, because it takes up more of the bandwidth, explains John Angeli, editor for BBC Interactive TV news and broadband.

"You can't jack it up quickly, and even if you wanted to, there's the licence fee to bear in mind. We have to look at the value for money of interactive services, he adds.

And how is that judged? "The viewers will decide whether it's valuable. We get our figures from BARB (the British Audience Research Board)." However, for the first three months of this year - pretty much from the time BBC Interactive began - BARB's updated system has been in disarray, infuriating TV companies, especially those operating digital channels.

But there is one thing of which Angeli is certain: audiences are increasingly demanding the ability to choose the content they want at any time.

"It's more likely that in the future people will watch, say, weather updates that have been saved in their set-top box or personal video recorder, he says.

In the meantime, the BBC has established some remarkable benchmarks for interactive TV - its annual charity event, Children in Need, raised nearly £500,000 through viewers who made donations through their TV sets in the first year the charity offered interaction.

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