Industry eyes Sky’s interactive slot
By Dr Neil Garner, Managing Director, Glue4
www.glue4.com

When Sky launched its innovative chip-based credit card SkyCard last year it was hailed as a revolution that would mark out television as the next battleground for customer loyalty. Cardholders collect SkyPoints when they spend on the high street or online and redeem them via the TV against Sky offers such as premium content. It marked a true first in cross-platform marketing.

However, SkyCard is only the beginning of the story when it comes to thinking about the opportunities offered by smart cards and the second interactive set top box slot – a facility that laid dormant until SkyCard’s arrival last year. And with 8.1 million set top boxes in UK homes, it is an opportunity with sizeable potential.

In the next few months we will see the arrival of other smart card based propositions designed to work in Sky’s interactive slot. But these will not just belong to Sky. Instead broadcasters and brands will own the communication channel with the viewer bringing to life a whole range of applications that will see consumers interacting with the TV in entirely new ways. So which industry sector is looking at doing what?

1. TV loyalty card
MiCard is likely to be the first company to take advantage of the interactive slot. A broadcast partner is expected to sign up soon to this innovative hybrid of affinity marketing, sponsorship and loyalty cards that uses smart card technology to reward viewing with value redeemable in the high street or through virtual reward schemes. MiCard monitors and rewards viewers’ loyalty to a particular channel while providing unique data, correlating viewing habits with high street spending behaviour.

2. One-to-one marketing
The first consumer brands to use the interactive slot will be those with significant TV ad spend - attracted by their understanding of the medium plus the ability to identify the individual using the TV. That knowledge opens up a range of opportunities in terms of tailored and innovative one-to-one marketing campaigns. In addition, smart cards are now cheap enough to be used in traditional sales promotions. For instance, by attaching a branded smart card to product packaging, consumers can insert the card into the slot to enter a competition or spend a voucher.

3. Banking
SkyCard has already proved that consumers can and will manage their finances – in this case their Sky credit card and loyalty points – via the TV. Other banking customers using the TV to securely manage their account using their card and PIN in the interactive slot is the next step. Offering genuine consumer benefit and another service enhancement for banks with existing online offers, all it takes is the right financial services brand to seize the opportunity and the potential will be realised.

4. TV commerce
Limited commerce is already possible on Sky, for instance consumers can order and pay for Domino’s Pizza using SkyCard. Other retailers are now looking at allowing viewers to transact with their SkyNet sites - Sky’s new TV based web portal – by entering their payment card details via the remote control. And the technology is in place to allow this. However, true TV commerce via Chip and PIN will become a reality only when other card issuers are prepared to endorse the business model behind a payment mechanism that will work in the interactive slot.

5. Personalising the TV experience
As the number of TV channels and gaming options on the TV proliferates, TV brands are looking for new ways to personalise the TV experience and retain loyal viewers. By issuing personalised smart cards, viewers could store such details as high games scores and viewing preferences. In addition, cards could provide access to restricted or premium content or opt in services associated with viewer clubs, for instance a Disney Card for kids.

6. Government services
The government is committed to providing a broader range of services through new channels – internet-based PC, mobile etc. Interactive TV is already being used as an access channel by a large number of consumers without PC-based internet in the home. In the future the national ID card could be used as an authentication and personalisation device in the slot allowing individuals to access the services they need. For instance, benefits and bill payments could be automated through the TV or personalised medical information provided by NHS Direct.

The bigger picture
When Sky - and other companies such as Virgin/NTL and BT who also have set-top boxes with card slots – introduce broadband TV, more services will be delivered to the TV such as video on demand, on-line radio, internet access, etc. When this happens, interactive TV will be delivered over broadband not via broadcast. The card will then become an essential tool to help individual consumers authenticate themselves to services and ensure revenue streams for digital service and content providers.

In the meantime, the launch of SkyNet which allows organisations to have a web-presence on all Sky boxes, makes smart card applications on the Sky platform a lot more compelling. After all, the Sky interactive slot is freely available to any broadcaster that supports interactive services on Sky. And if there is demand, Sky could easily add the existing SkyCard or payments functionality to SkyNet. All that is required is the imagination to create a winning consumer proposition and the systems integration expertise to make it happen.