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CNN, Fox Reality, HSN Sign On to ICTV's Web Play

5/07/2007 3:23 PM Eastern

Las Vegas -- CNN, Fox Reality Channel and HSN agreed to produce interactive channels with service provider ICTV, which is pitching its system to both cable operators and programmers as a way of offering Internet content on TV sets.

At first, however, no cable subscribers will be able to access these interactive "Web" channels.

ICTV signed one small operator, San Marcos, Texas-based Grande Communications Networks, to run a mosaic application that allows a viewer to toggle among several live cable channels on a single screen. Grande initially will make available 20 channels in the mosaic, five of which will be viewable at any one time.

But Grande, which has about 130,000 customers, hasn't yet signed deals to carry the ICTV-enabled interactive channels from CNN, Fox Reality or HSN. Nor have any other cable operators in the United States announced plans to do so.

It's something of a chicken-and-egg problem, acknowledged ICTV chief operating officer Ed Forman. But, he added, "We are getting the chickens and we're getting the eggs."

Fox Reality vice president of business and operations Ed Skolarus said the network hopes to launch its ICTV-based version of Videosplat, its video-clip Web site, in July. He would not comment on which operators have signed up for the service, but he said Fox Reality received positive feedback on Videosplat, which, in ICTV's system, takes up one-half the bandwidth of a regular video-on-demand channel.

“The dynamic fashion we’re able to offer the content will be very appealing to operators and viewers,” he added.

ICTV positions itself as a content-distribution network, bringing content that TV networks produce for the Web into on-demand cable channels. In addition to the three cable networks, ICTV has deals with weather service AccuWeather and financial-news service Reuters to create interactive-programming channels.

For cable operators, ICTV promises to provide all necessary equipment and cover the costs of systems-integration work. The company charges programmers a fee based on the aggregated number of viewer hours for their interactive channels. The idea is that programmers can sell advertising against the TV-delivered content made available through ICTV’s ActiveVideo Distribution Network.

ICTV is hoping that its work with CNN, Fox Reality and HSN will land it more distribution deals.

“We’re seeing big television programmers -- Turner [Broadcasting System], Fox, HSN -- use their pole position to move their viewers into more engaging content,” Forman said. The next battle for ICTV will be convincing operators to deliver it.