The Changing Look of TV: Walled Gardens and TV Portals

by Edward B. Driscoll, Jr.
Winter 2001

The phrases "television portals" and "walled gardens" have become increasingly popular buzzwords in the interactive TV industry. While they initially sound confusing, anyone who's ever stayed at a hotel with some sort of proprietary TV service has seen the concepts in action. Bob Mariano, of Steeplechase Media describes the concept.

"In many fairly upscale hotels, when you turn on your set, it doesn't just go to the local CBS channel, it defaults to a custom page. It talks about using the TV, it talks about hotel services, it talks about movies and restaurants. That's kind of a walled garden."

The cable industry's definition of a walled garden builds on that to include the ability, via a set-top box, to switch over from watching TV to sending e-mail and surfing a combination of proprietary Web pages and virtual channels with full-motion video.

Similarly, a portal is essentially an un-walled garden, containing a mixture of proprietary interactive content and the ability to surf the World Wide Web. Set-top boxes supporting either or both types of access will eventually include digital PVRs (personal video recorders), making them almost as versatile as Swiss Army knives.

Both concepts trace their roots back to Europe in the early- to mid-1980s. European telephone costs, particularly in England, have long been more expensive than those in the United States. As a result, messaging uses started in the early 1980s with teletext text over a conventional television screen have become increasingly popular. "In England, there is maybe a 15-percent penetration of set-top boxes now, that can not only just do text, as teletext used to do, but can also do graphics," Mariano said.

Virtual Channels
Steeplechase Media, where Mariano serves as Vice President of Marketing, is one of the "virtual channel" creators for the next generation of American cable set-top boxes.

Virtual networks will be carefully targeted niche channels, similar to today's cable networks, he said, like Animal Planet, Bravo and Home & Garden TV, but in much shorter form.

Unlike some consumer electronics offerings that seem to be spurred on merely by the technology that allows its existence, virtual networks have a foundation in the economics of television viewing.

Steeplechase recently issued a report stating 53 million households will use digital-video recording in some form by 2004, in set-top boxes such as TiVo or Microsoft's UltimateTV, or built into the TV sets themselves. The growing popularity of PVRs has enormous ramifications for the cable industry; if everyone is zapping past commercials on PVRs, advertising dollars will likely tumble.

Virtual networks are one way to compensate for that. Steeplechase is preparing short-form (20- to 30-minute length) daily programming that will download to a digital set-top box for viewing later, at the customer's leisure.

While much of the cable industry is looking for ways to deliver movies on demand, Mariano said that short form programming is both easier to create, and less likely to crash servers at cable company head-end operations "because everyone called up Pearl Harbor at the same time."

The Horse Channel
Mariano used the example of an equestrian channel as a typical virtual network. Such a channel, underwritten by an ally of that industry, creates contextual marketing consisting of content and advertising linked by a single theme.

Unlike traditional TV shows, this program could be called up at any time via a user's set-top box. It would always be there, just a remote click away. "With video on demand, of course," Mariano said, "you can have the best horse racing and information about saddles, food, health and general care for half-an-hour, or 20 minutes a day. And you can call it up whenever you're free.

Additionally, it would be interactive. Two-way interactive niche channels such as Mariano's proposed horse channel would allow for immediate action by the viewer. "Right now, it's a one-way system," he said. "I can get emotionally involved with something, and think 'Oh, look at that fantastic stirrup! I've got to have that for my favorite horses.'" But with interactive niche channels, a few clicks of the set-top box's remote control would complete such a transaction.

"It's a much more efficient form of advertising, Mariano said. "It's a more developed instrument, for both the advertiser, as well as for the audience." And because it's more efficient, less advertising can go a lot further.

Digeo: The Portal in Action
Digeo, backed by Paul Allen, the ex-Microsoft partner, is a key building block in Allen's "Wired World" concept of converging the Internet, television and broadband access. About 25 people in the St. Louis area are currently testing it.

Most of the digeo testers are employees of Charter Communications, the fourth-largest cable company in the country. (Allen also controls Charter.) Andy Morgan, Charter's manager of communications, said Charter is hoping to increase the number of people with digeo access to a couple of hundred by the end of the year, as part of a thoroughly tested roll-out strategy.

Depending upon the sophistication of the head-end equipment at each cable company's facility, two types of set-top boxes will power viewers' digeo experiences. The first is a "thin client," providing access to the walled garden of proprietary digeo channels, and consisting mostly of customized Web pages and e-mail service.

The second is a "thick client" box, which will require less work at the head-end, and provide more services for viewers, including eventually, a PVR to add full-motion video to digeo's content. Both of these boxes exist in Motorola products: the DCT-2000 for the thin-client version, and the smarter DCT-5000 series for the thick-client version.

What will these early subscribers to digeo see on their TVs from these boxes? Most of the screens will focus on topics, just as Steeplechase's proposed virtual channels.

"We're initially planning our categories on news, sports, weather, entertainment, money and games," Mariano said. "And that would be on the first version of what we're putting together. As we go along, we'll add other categories." He said the initial material would include "content that's pre-selected by digeo that can be personalized by the customer, but you'd also have the ability to go out on the World Wide Web.

Digeo is designed to bridge the gap between people who want to get some Internet content, but don't want to go through the hassle of setting up a personal computer to get online.

"The whole idea," Morgan said, "is that when people are using the television, they're in a relaxed mode; they want to be entertained as well as informed. We've called this 'self-controlled entertainment.' We try to make it as easy as possible, using the television to do things like surf the Internet, or check the news, or check your portfolio. I think we're just giving a lot more choices (to customers) and making things a lot more convenient for them. I mean, it kind of centralizes a lot of this stuff in one place, in a way that's easy to use, hopefully.

So, what will digeo cost? Morgan said that nothing has yet been finalized, but "I think they want to make it to where it's not outrageous." He added, "I do know it's going to depend on whether you have the thin-client version, which I think will probably be made available to everyone, just as part of the digital cable service. The thick client would have a charge, but nothing's been decided yet.

The thick client would combine the basic digeo portal with a PVR. Morgan said digeo plans to roll this version out early next year. "Whether or not that same box has interactive TV capability, it's going to kind of be up to the customer and up to what the system can handle."

The Computer Generation is Waiting and Anxious
Bob Mariano said walled gardens and portals like digeo create a new kind of television, due to distinct differences from what our parents experienced in its early days. "When it becomes ubiquitous, then it will be like color television. You don't say, 'Hey, let's sit down and watch some color television.' It's just television.

"But for the moment, the next four or five years or so, I think it's probably going to be a newer kind of television experience, to put these things together. And we think the computer generation that's grown up is ready, and waiting and anxious for it."