This is a what’s old is new again story we picked up on the Japan wire today. In a modest but remarkable announcement, Japan’s (and arguably the world’s) top CE manufacturers Sony, Matsushita, Hitachi, Sharp and Toshiba announced they have joined forces to broadcast interactive commercials that can be seen on television sets capable of accessing the Internet.

Steve Sechrist
Senior Analyst and Editor
Projection Monthly

The idea harkens back to the days of early radio when RCA Corporation sponsored broadcast programming to provide listeners with a reason to buy the set. This time, web-enabled TVs with a click of the remote, can interact with advertising and even select the kind of ad they want to see-but not from a traditional broadcaster, rather your TV set maker.

Individually, the firms already provide a variety of information like news and weather forecasts via the Internet, the new business venture will be incorporated into these operations. But the implications of usurping traditional advertising, in essence creating an entirely new delivery mechanism from the TV manufacturer are astounding when taken to its logical conclusion.

Here’s the point. Bill Gates had the vision to see and invest in the most valuable real estate in the 20th century, and no-it’s not in Redmond, WA. We’re talking about the virtual desktop space on a PC. Now as digital convergence is in full swing, TV’s, particularly - in Japan where internet connectivity is mandated, (think AppleTV in the US) - are leaning more on the internet backbone as a primary delivery system. Look no further than Google’s market cap for proof.

The new desktop of the 21st century is-you guessed it, your living room TV, complete with 40+ inch flat display and a host of digital connections to bring you any content, anytime.

Now a consortia of top TV makers are developing an interactive web portal that may become the default screen when you first turn on the set. Manufacturers can write software that usurps any input source, creating a window in a larger desktop they control-complete with banner ads and the like.

Don’t get me wrong, this is cool stuff but this kind of digital convergence can get dangerous for entrenched broadcasters. No longer can they assume control over, or guarantee delivery of, eyeballs that make up the life-blood of advertising. Even more to the point, the manufacturer’s ads will offer superior results. Because they are interactive, these ads deliver to advertisers clear and precise data on exactly who is watching what, solving the age old broadcast advertising dilemma.

So get ready broadcasters, for yet another assault on your fiefdom-this time from the very allies that deliver your programming. It is indeed an amazing time to be alive, but more scary for some than others. When former FCC Chairman Michael Powell told the NAB crowd three years ago "evolve or die", he wasn’t kidding.

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