Potatoes No More!

Albert Chung had raced the five-mile track in Mugello, Italy, so many times he knew just what the other motorcyclists competing against him were going to do--before they did it. That's because they weren't real motorcyclists; they were virtual ones in the videogame MotoGP. Despite all the artificial-intelligence tricks programmers have at their disposal, players of even modest skill and experience can suss out videogames not long after tearing off the shrink wrap. Recently, Chung, a 20-year-old employee at Electronic Boutique in Phoenix, who doubles as a videogame tester for Xbox Live, got his hands on a not-yet-released version of MotoGP that's certain not to get stale. Rather than relying on AI, it's designed so that 16 players, each from the comfort of his own television set, can compete in the same game. The difference was dramatic. Since each motorcyclist jockeying for position around the turns was a virtual proxy for one of Chung's friends, Chung hadn't the slightest idea what they were going to do. Forced to push himself, he hit 180 miles an hour on the straightaways for the first time. "It was a pretty decent game to begin with," he says, "but the new version was incredible."

TV has never involved this much adrenaline before. Ever since the days of "The Ed Sullivan Show," the medium has been the archetype of passive entertainment. Now the industry is trying to change that by adopting Web-like technology. In the next year or so, media and entertainment companies plan to hit the couch potato right between the eyes with interactive services designed to make the TV a hub of games, information and family activity. Unlike WebTV a few years ago, the new services offer more than merely online access. Many of them are enhancements of regular programming--like displaying several football games at once or delving into background in-formation. Some will be new ways of doing old things--like video on demand, which allows viewers to rent movies without the trip to Blockbuster. Perhaps most intriguing is personal video recording, which allows viewers to pause live TV, run to the fridge, then fast-forward through ads. TV's best minds--among them mogul Barry Diller--are convinced that interactive TV will, after several false starts over the past decade, finally begin to take off on the strength of such offerings. What has everybody on the edge of the sofa is the prospect of some killer app's turning iTV into a phenomenon. If that happened, what would it do to the status quo? Will greater viewer control overthrow the whole business model of TV, based on selling ads to a largely captive audience? Will it transform how we watch TV?

This isn't the first time the industry has tried to give viewers an active role. In a 1970s experiment conducted in seven U.S. cities, Warner made a serious effort with Qube, a service that, among other things, allowed viewers to order movies with the press of a button. Tracy Swedlow, editor of the newsletter InteractiveTV Today, remembers growing up in Columbus, Ohio, in the days before videocassettes, and having to go to a friend's house to use the Qube service. "The most exciting thing in Columbus was going to the shopping mall or the bowling alley," she says, "and here we were watching these MTV-like dance shows and voting on which ones we liked best." Warner put the project aside because it was too expensive to bring two-way networks into the home. In 1990 the BBC dabbled with some straightforward text enhancement to its TV service, giving viewers the option of seeing news, weather and stock prices run across their screen.

The TV industry has two things going for it that weren't in place in the 1970s--or even the '90s. First, cable and satellite now reach the vast majority of U.S. and European homes. Second, the Web has made most people comfortable with the idea of pointing and clicking.

The BBC has probably been the most flamboyantly experimental iTV network. It scored its first hit during Wimbledon in June 2001. Rather than deciding which tennis match to televise at any one time, the BBC let viewers watch up to five at once on split screens. Since then, the network has come out with a steady stream of iTV programming. It offers parallel footage along with documentaries that lets viewers in on how a program was made. A show on the Egyptian pyramids included an interactive quiz game; viewers got to guide an ancient tomb raider through various challenges with the goal of unlocking the pharaoh's hidden chamber. On "Test the Nation," viewers can compute their own IQ. On "Antiques Roadshow," they guess the value of items. "It's brought in a younger audience," says Ashley Highfield, the BBC's iTV head. "I would love to get involved in interactive dramas, maybe allowing the viewer to switch from one character's point of view" to another.

Commercial television companies, which have to keep an eye on profits, have been less daring. In the United States, video-on-demand services, which offer rented movies at the click of a button, have been first off the mark. Time Warner Cable has run trials in San Diego, Honolulu and Tampa, Fla., and is rolling out the service in New York. In 2003 cable companies plan to use VOD to lure customers away from satellite TV. According to the media-research group Kagan, the number of households with VOD will nearly double next year to almost 8 million. Yet this rosy forecast glosses over potential snags, even for a service as conceptually unchallenging as VOD. A lack of copyright and syndication rights may delay growth, according to Josh Bernoff, an analyst at Forrester Research. That's why the first companies to have VOD offerings have been HBO and others that own their own content.

The biggest barrier to VOD and other iTV services is technophobia. In test markets, viewers often don't know they even have the service, or they balk at trying to navigate it. One solution is to give the TV screen the look of a Web page, with tool bars and display menus. TiVo, which pioneered personal video recording, has had trouble convincing people that its expensive device and monthly fee offer something more than a fancy VCR. Yet TiVo's small but loyal following suggests viewers can be made to appreciate the advantages, which include recording shows without having to worry about air times. Cable firms plan to launch similar services.

Since younger consumers tend to be early adopters of new technology, videogames are a better bet to take off quickly. One survey last June showed that half of videogamers would be willing to pay $5 a month to play online. In recent months the big three firms--Nintendo, Sony and Microsoft--have introduced online components. In two years, experts say, it's possible most gamers may go online via TV.

If iTV takes off, network executives face a conundrum: the more control they give viewers, the more they threaten the status quo. Rick Mandler, a Disney vice president of enhanced TV, thinks iTV firms will push for a redesign of personal recording services so that they are "advertising friendly." Will the rest of us adapt? "It's going to be an evolution, not a revolution," says Maggie Wilderotter, a San Francisco Bay Area iTV entrepreneur. "People watch television to be entertained. It's not work." But Swedlow says the changes will be fundamental: "iTV will feel more like a tool you can use, rather than a tool that sort of plays at you." That kind of change may take a generation to absorb.