A Content Analysis of U.S. Interactive Platforms

23 April 2002

Enough time has gone by since the Internet's advent for Americans to form some interactive habits. Like crystals precipitating out of a cloudy solution, the way Americans interact with the outside world through different platforms is settling into perceptible patterns. What are they?

Content Analysis of U.S. Interactive Platforms TV PC Internet  Wireless
Interactive negligible chat, email, tickets, many services, messages, jobs, personals

2-way voice
Passive movies, TV, news news, pornography, music, some
movies and video

Shopping with telephone return

books, music, clothes, many other

Data & Information

0 everything
Games & Gambling TVG (horseracing in limited markets) games, gambling ?

The data contained in this table are protected under United States copyright laws. Any reproduction or redistribution of these data without the written permission of Christiansen Capital Advisors, LLC is strictly forbidden.

The exhibit summarizes the interactive uses Americans make of three household and office platforms: the living room TV set, personal computers connected to the Internet, and wireless handsets. These interactive habits, like habits of other kinds, are conditioning Americans to think of these three platforms in particular ways, ways that may not match up very well with the strategic plans (wishful thinking?) of the platforms' owners or the ways in which they are used in other parts of the world. Another way of thinking about the Exhibit is to say that it provides a content analysis of American interactivity, as opposed to a technological analysis or an investment banker's projection of what these platforms might look like if only American interactive habits were different.

So how do Americans use the interactive platforms available to them?

First, a lot of American usage isn't very interactive. It is passive. The couch potato habits formed a generation ago by broadcast television persist in the interactive age. Americans like to watch. They watch television's Big Three: sports, war (news) and movies. As Insight Communications is proving with the interactive service it offers to its cable subscribers Americans will interact through their television sets to the extent of watching these staples on demand instead of according to schedules set by TV networks, but such usage is weakly, not strongly, interactive and it is a long way from the strongly interactive behavior involved in playing fantasy, role, or casino games.

Second, only one platform, the wireless handset, is used exclusively for an interactive application: talking to someone else on the telephone. In other parts of the world multiple uses for wireless handsets have already evolved: instant messaging is ubiquitous in the GSM community, because, with a single, technologically advanced open standard (open platform) everybody's handset can send and receive messages from everybody else's handset. In effect, GSM wireless created mobile email. In the U.S. competing, proprietary, technologically backward closed standards (closed platforms) prevented this development, and U.S. wireless phones, years behind GSM as well as Japan's iMode, are used only for two-way voice communications. In Japan and the GSM community content developers are busily creating data and information services, games, gambling, and retail of various kinds for wireless handset users already conditioned, by instant messaging, to using their "telephone" handset keyboard to input text. Buying a lottery ticket in this manner is a natural. Wall Street confidently expects similar uses for wireless handsets in to evolve in the U.S. any day now, funding spectrum acquisition for startup wireless ventures at insane valuations and reacting in shocked surprise when the startups crater. No one should be surprised. The recent write-down of NTT DoCoMo's investment in ATT Wireless, heralded by Wall Street analysts as the rising sun of multiple wireless applications in America, is a good indication of where things wireless actually are in this country: nowhere, except for two-way voice. Ominously for telcos that would like to see the question marks under the wireless column in the Exhibit filled in, take-up rates for the so-called 3rd generation (3G) wireless service launched by DoCoMo in October are far below expectations. As in Europe and the rest of the global GSM community, consumers are pretty satisfied with 2.5G service, which keeps getting better. Wall Street, like NTT DoCoMo, forgot to check with the American consumer, who, as far as interactive platforms are concerned, is moving in other directions.

That direction is toward the personal computer. When Americans want to interact strongly--when they want to play games, or gamble, or shop or download music or pornography they sit down in front of their computer. If they want to do these things somewhere else they take their notebook PC with them and log on where ever it's convenient. The PC is also making inroads into one of TV's Big Three: news, which, especially with fast-breaking stories like 9/11 and its aftermath, Americans increasingly follow via the Internet.

This is not good news for cable companies, which have bet a large part of the farm on interactive television. Last week (on April 17, 2002) Cablevision rolled out its iO: Interactive Optimum suite of digital services to 148,000 subscribers in Morris County (New Jersey). iO starts with video on demand (VOD) and runs on through music, special interest video channels, something Cablevision calls Mag Rack, a digital program guide, email, archived TV serials, news, sports of every description, blackjack, trivia, hobbies, lifestyle programming, weather, opinion polls and etc. for seven column inches of a single-spaced press release (CCA News, April 17, 2002). In other words, Cablevision's iO delivers what TimeWarner's earlier generation Orlando interactive service promised; it delivers what millions of interactive television households in the U.K. and Europe have today.

Will Americans buy it?

Ultimately we think they will, but "ultimately" is out there sometime in the future, perhaps a long way, and billions of more invested dollars, from today. Tomorrow, next quarter, and next year when Americans want to gamble at home they will do exactly what they did yesterday: sit down in front of their personal computer and log onto their favorite gaming or betting service provider.

In the United States, where gambling, as well as shopping, game-playing, email, instant messaging and most other kinds of strong interactivity are concerned the wired personal computer got there first. The other interactive platforms, television sets and wireless handsets, have an enormous amount of catch-up ball to play.

Christiansen Capital Advisors, LLC is a gambling and entertainment industry research and consulting firm. The company's Web site, www.cca-i.com, offers a large selection of research items on an array of gambling industry topics, including Internet gambling, riverboat gambling and fantasy sports, as well as charts and tables from the report "The Gross Annual Wager of The United States," a comprehensive account of all forms of wagering in the United States that has been published annually since 1982. To subscribe to CCA News, their free daily e-mail newsletter, send a blank email to subscribe@grossannualwager.com.