SPORTS ILLUSTRATED's INTERACTIVE TV TEST LOOKS PROMISING

Circulation Management, Sept, 2001

Television viewers can now subscribe to Sports Illustrated with a click of a remote control. In late July, SI became the first Time Inc. title to test the subscription potential of Wink, an interactive television enhancement technology from Wink Communications.

The technology displays messages on-screen as viewers are watching a show or commercial, enabling them to order products, request information and engage in other interactive activities.

SI has been running sixty-second and 120-second subscription promotion commercials featuring the Los Angeles Lakers' 2001 NBA championship victory.

SI's soft, bill-me offer--55 issues for $82, or $1.64 per issue (a savings of 45 percent off the cover price)- includes three premiums on payment a hard-bound SI book commemorating the Lakers win, a Lakers team video highlighting the season, and a Lakers hat.

At press time, the test was only two weeks old. However, Time Inc. marketing manager Ayanna Victorin told CM that the early results looked promising. "We are pleasantly surprised, but we're being very cautious," she said.

Time Inc. is starting slowly, airing SI ads between 10 and 14 times per week on Turner Network Television during the mid-prime and overnight hours. The publisher pays Wink on a per-inquiry basis.

"Although we own a lot of different online properties, this is another efficient source," noted Victorin, who added that she would expect the test to generate hundreds of new subscribers, at minimum, by year's end.

The test is scheduled to last until the end of September, when Time Inc. will decide whether to continue testing or roll out the program.

SI was selected to test Wink because it is Time Inc.'s "benchmark" for direct response TV, with a 52-week presence on the air, Victorin explained. Other Time Inc. titles may follow in the future.

The technology "is like DRTV on steroids," says Wink director of advertising sales Colleen Dolan. No phone calls are necessary. If viewers choose to interact with Wink-enhanced commercials or television programs, which are identified by the on-screen display of a Wink icon, they use the remote control's up/down arrow keys and select! enter buttons to navigate and respond on demand.

For direct marketing purposes, the beauty of the technology is that it encourages impulse purchases because there's no need to get off of the couch and go to a phone to call a toll-free number, as with standard DRTV, points out Dolan.

Wink technology is distributed through partnership agreements with major cable and satellite operators (including Time Warner Cable, Adelphia and DirecTV), network and cable broadcasters (such as NBC, ABC, CNN, USA Network and The Discovery Channel), national advertisers and manufacturers of consumer electronic equipment. The service is automatically activated and free to consumers whose cable or satellite providers are Wink partners. Aside from a remote control, a viewer need only have a set-top box to use it.

Since Wink is integrated with a cable or satellite provider's billing system, viewers need not enter their name and address to receive an invoice or have a product delivered. It is a one-click transaction. If applicable, viewers may enter a personal identification number to charge a purchase to a credit card on file. (SI is not yet offering this option.)

According to Wink, there are currently more than four million Wink-enabled households, 59 percent of which interact with commercials and television programs each month. Clicks average 2.3 million per week.

Still, the technology's reach will cap the growth potential of this source at some point, Victorin acknowledges. "Growth is somewhat contingent on how many homes Wink is able to expand into," she says. "This is something new, and we've been eager to try it. We'll continue to expand onto other stations, which is likely to increase sales."

While only 8 percent of U.S. households will have interactive television by the end of this year, Jupiter Media Metrix projects that 42 percent will have it by the end of 2005. And according to a recent report by Direct Marketing Association senior VP Michael Faulkner, interactive television is expected to generate $7 billion in sales of products and services and $11 billion in ad spending by 2004.