Network Insight Institute

Liz Norris

Liz Norris, Optus

I am now going to go through some of the key insights from the Optus iTV trial, particularly in relation to the customers and also the market and business drivers.

Just to give you an overview, near video-on-demand is the absolute star of the platform. Our customers absolutely love it. They love the fact that this is something that they have heard about, or dreamed about, and now they can access it and it's real. They love the fact that they can control when they watch it.

It number one at the moment, and 100 per cent of our users are using near-video-on-demand. However the content is currently free, so once we start charging for it, it will be interesting to see how that falls back. Nevertheless we still believe that from all the research we've done, that will be one of the prime drivers for take-up of interactive. That has been the case in the UK also.

The EPG runs a close second. Our users currently access it at least once a week. We are finding that it is a habit just as TV viewing is a habit. I might go and tune in to a certain program 9.30 on a Monday evening. They go and set their EPG reminders at a set time too. I find that quite fascinating.

Following EPG in popularity is TV mail. TV mail is also proving to be very successful, allowing our customers to send and receive e-mails. The only difference is that they can't use attachments because it's not a PC. I really do stress, as part of the education process that a TV is not a PC, and it never will be. This is all about the converging applications, rather than the converging devices. We do have a hard time on our hands at the moment educating our customers that it's not a PC. They don't understand why they can't send attachments, or why they can't do all the things you can do on the Internet. We have to explain that it is just a different product.

TV mail is not meant to replace email, or the way you interact with your PC. It just means that you can sit in front of your TV, and if you just want to send a quick mail, or check something quickly, you don't have to go off to the study, turn your computer on and wait for it to connect. Instead you have instant access, via full two-way, always-on, interactivity.

TV net is another area. We are looking at rebranding that, but essentially it is the walled garden I referred to earlier. We currently have about 50 content partners, with a range of transactional and informational services. We are currently dong a lot of work on driving usage of TV net. We are finding that to be quite a difficult area, for reasons I will explain in a moment.

The other thing I want to go through too is the importance of not over-hyping the service to the customer. Kim Anderson has mentioned on this already. Also, from my experience previously with broadband, we spent a lot of time educating the market about what broadband was, and making sure we didn't over-hype the product and really set that expectation. What we have found from the trial is that there is a lot of confusion out there about what digital TV actually is. So from a market point of view, it is very important that we send out those consistent clear messages all the time.

We also need to set the expectations. You could take the view that interactive TV is this new category, and it is going to change the way people interact with their TV. I would say, yes it will change behaviour but it's not I don't think a new category. It is very much about more entertaining TV, and allowing people to do more with their existing TV set. The message there is really that consumers don't have to upgrade their TV in the short term. Consumers are very confused about this; they think digital TV means that you have to buy one of those $8,000 TVs. But it isn't. It is simply about getting a set-top box that converts your TV to digital. They love that idea.

The other key thing is that what you do, you need to do well. From our trial we have found that that, rather than try and be everything to everyone, it is more important to really focus on what's core to our business, what's important to our customers and what prevents churn. EPG for example is one of those areas that we're really focussing on, because it's a core application of the product and we want to make sure that the experience consumers have with that is always positive. If the program schedule is out, and I set a reminder based on that schedule and I miss my program, then that is not a good experience for me. That is something we want to make sure that we manage.

Small irritations can very quickly become potential churn issues, so we are really focussing on the useability of our service. With something like TV mail for example, how do we improve that so that everything is really easy to use, through the remote control? With useability we also need to make sure that everything is one or two clicks of the remote away. From the trial we have found that if people have to do something for too long, then they won't bother.

I would also add that in an interactive environment content needs to be thought about differently. I don't think the UK necessarily have this right; their customer expectations have ranged from amazing to absolutely woeful, and they have changed models about three times now. So I think we should be working on some new models here, which will take time, but hopefully evolve over the next year or so.

In addition, any content you have on the platform really needs to stem from what you do on broadcast. At the end of the day you are not turning your television on to surf the net, you're turning it on to be entertained and to watch TV programming. Anything you do in the interactive space has to enhance that.

For example, I'm watching MTV, and the little icon pops up at the bottom that says 'Buy Madonna's CD'. I press 'Yes'. That takes me through, I buy the Madonna CD and I do all that while I'm still watching MTV. Now that is good content, because it is in context and is relevant to what I was doing in the first place. For us in particular the focus is now also moving away from content for content's sake to the enhancement of existing content on our broadcast channels.

From an intuitive point of view, iTV is different to the Internet. Customers are not really willing to look deeper for information if they can't find it straight away. You really need to make sure that whatever content you're doing is up-front and really close to them, so that they can access it very easily. It also needs to add value to them. A good example here would be ABC news - it being one of the highest performers in terms of the current content on the platform.

Fulfilment in the brand is also very important. For example, when our customers buy something and it doesn't turn up, whose responsibility is that? Obviously it is not Optus' responsibility, because we are not providing the service. But from a customer point of view, it is very much an issue and therefore it is something we at Optus need to manage. So we are currently working with some of our content partners on different sort of Service Level Agreements, which may specify something like the percentage of times that orders need to be delivered on time.

The balance between TV and Internet is also quite interesting. You have all these reporting mechanisms you would ordinarily have with broadcast, but you also have all the Internet ones as well. At the moment we're trying to combine those, by working out what metrics and measurements really make sense. There is so much information out there, so we need to work out what people actually need to know, and what is really relevant.

Finally, interactive needs to be as easy or easier than the alternatives. For example if I want to order a pizza, which as an example is done to death, can I do that more quickly through the TV than I can through the phone? Unless it is quicker than the phone, I will only order it once novelty value, and never do it again.

We also look at the balance between getting there versus making it work. We now have 50 content partners on our platform, who are all learning. Now that the content is there, how do we make it work? How do we make it relevant to consumers? How do we start making them use it, and buying things? This is a huge challenge for us at the moment.

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