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The Future of Interactive TV

From The Globe and Mail

By Scott Valentine

While NanoGaming may conjure images of microscopic robots battling it out on a m

iniature playing field, what it really means for some advertisers and broadcasters is much bigger.

According to consumer research firm Park Associates, 70 per cent of people underthe age of 34 surf the Internet while watching TV. And when there's a game on,as many as 50 per cent of sports viewers also use an Internet-connected computer. Called 'two-screeners,' this young, Web-enabled demographic is just the type of consumer that advertisers lust after.

Introduce something like NanoGaming, which allows viewers to interact with whatthey're watching and compete against other viewers for prizes, and you have whatis potentially the killer marketing app for reaching this tech-savvy segment, e

xperts say.

"Everybody wants to be part of that experience," says Dave Bullock, president and co-founder of LiveHive Systems Inc., the Waterloo-based company behind NanoGaming, which has inked deals with NASCAR, the NFL, and Global TV. "How you deliverit and where it's commercialized is the question."

NanoGaming blends bar-style trivia games with social networking and challenges participants to use their knowledge of what they're watching be it a sports game or a reality TV show to anticipate what might happen next. Fans are presented with possible scenarios, such as, "Will Tom Brady score on this drive," or "Who'll get kicked off Big Brother this episode?" Answer them correctly and playersearn points that can be redeemed for a variety of rewards such as big-screen TV

s or trips to sunny locations.

Meanwhile, players interact with company brands like Coca-Cola and Lexus on theNanoGaming website in what amounts to a synchronized sporting event/game show/commercial.

In a similar venture, Santa Monica-based Jacked Inc. signed a deal in December with NBCSports.com to provide news and information such as statistics, player profiles and a chat service during Sunday Night Football broadcasts.

Advertisers and broadcasters are warming to the nascent genre of interactive entertainment, believing they're reaching a captive audience. Because the viewer is

so absorbed in the interactive experience, they are more engaged and have a higher level of recall, marketing experts say.

"In NanoGaming, if you get the psychological elements right and you let the consumer know the moment is being brought to them by Coke or whoever, they'll probably be happy to buy something," says technology analyst Bill Harvey, founder of New Century Media. "If instead of interrupting consumers with advertising that they don't want, you bring them programming as a gift you get seven times the average effectiveness of a TV commercial."

Plus and this is something advertisers and broadcasters love this type of interactive entertainment only works if the two-screener is tuning into a live broadcast. With the growing popularity of digital video recorders (DVRs) and their

ability to pause live TV and fast-forward through commercials, advertisers are constantly on the lookout for live programming, which they consider the best venue in which to expose their brands.

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"We help eliminate that situation where the user is disengaging or choosing a DVR," says LiveHives' Robert Riopelle, vice-president of business development. "Itbecomes a situation where the interactive option is only available live, the first time something airs."

Another attractive aspect of interactive entertainment is that it straddles tele

vision genres and works effectively with sports, reality TV and other forms of live programming. It also attracts a diverse audience male and female that'sattuned to the nuances and communal aspects of social networks, Mr. Harvey says.And there's lots of room to grow.

"Online role playing worlds, video games, fantasy sports all these opportunities are immersive and are youth oriented," Mr. Harvey says. "As a cluster, that'scertainly worth billions of dollars."

Global TV, which tested LiveHive's NanoGaming platform during the most recent airing of the popular reality show, Big Brother 8, In the House, found the interactive element kept viewers tuned in to the show long after the credits rolled.

"Big Brother was on the radar because it has that kind of cult following [whereNanoGaming works well]," says Neil Sweeney, director of business development andstrategy for Global TV. "We were getting people logged in and interacting as two-screeners for up to 40 minutes, two or three times per week. People were in chat rooms long after the show ended, and picked up conversations over days and weeks."

While advertising and viewer retention are interactive entertainment's one-two punch, the hidden gem in something like NanoGaming is the customer data the interactive entertainment generates. Part of LiveHive's mandate, Mr. Bullock says, isto evaluate how people are exposed to brands and measure how they interact withthem. All that interaction creates a wealth of consumer data that holds tremend

ous value.

"It's as useful to us as it is to an advertiser," Global's Mr. Sweeney says. "Wetreat it like it's our brand, it's our audience."

But while interactive entertainment such as NanoGaming is a novel idea, it's still relatively new and faces considerable challenges. Adoption by broadcasters and content publishers has been stymied by complex intellectual property and digital content ownership rights. And, the two-screener experience still relies on large devices like a computer or television to be compelling. Without a viable mobile plan, the genre may get stuck in a rut.

Still, some experts already think interactive entertainment has a solid future.

"I explain NanoGaming to people at a cocktail party and they get it right away,"Mr. Harvey says.

Special to The Globe and Mail

BY THE NUMBERS

* 100 Million Number of U.S. TV viewers who surf the Net at the same time* 70 The percentage of people under 34 who watch TV and are online at the

same time* 39.5 The percentage of adults who regularly watch TV while online

* 13 The percentage of people under 34 who are looking up information online related to what they are currently watching on TV