ACTV, Inc.

» see actv.com as it lived, on the wayback machine

~ the last words ~

There is a particular kind of company that is always two years away from its moment, and stays two years away for a decade and a half while the moment keeps moving. ACTV was incorporated in Delaware in July 1989, ran out of New York, and spent its entire existence in that position. It was not a fraud and it was not badly run. It had working technology and real broadcast partners, and it lost money every single year of its life.

The flagship idea was Individualized Television. During a live broadcast, the signal would carry more than one video path, and the box in your house would let you choose which one to watch. You could take the camera behind the goal, or the analyst's commentary instead of the play by play. In a sports bar demonstration this looks like the future. In the room where somebody has actually put a game on, it turns out that most people want the director to make those choices, which is why there is a director.

The nearest ACTV came to me was as a paragraph in a technology magazine, in the years when every such magazine had a page about what television was going to become. That page ran for a decade with the details swapped out. I do not remember the name ACTV from it and I would not have had any way to try the product, because none of it left North American cable and satellite systems. What I do remember is the certainty in the writing, and the fact that the thing being promised each year was roughly the thing that had been promised the year before.

~ the record ~

~ the promise ~

The technology existed and it was demonstrated repeatedly. ACTV ran systems on Tele-Communications Inc. and on Le Groupe Videotron in the analog era, and Fox Sports Net tried the multi-angle product in 1996. Each trial produced good press and no renewal. The problem was structural rather than technical: making a broadcast individualized means producing several broadcasts at once, and somebody in a truck outside the stadium has to cut all of them. That cost lands on the broadcaster, and the revenue, if any, lands somewhere else.

So the company did what companies in that position do, which is find the part of the idea that somebody would actually pay for. That turned out to be HyperTV, a service that synchronized web pages with whatever was on air, so a viewer with a browser open could follow along with a show. It was less interesting than the original pitch and it worked, and by 2000 it was generating most of the company's $8 million in revenue. Every one of the deals behind that number was short term, arranged show by show.

~ the fall ~

ACTV was a dot-com stock without being a dot-com. It went from $1.50 in April 1998 to $45.68 on the last trading day of 1999, which valued a company with almost no revenue at a number that only made sense inside that specific eighteen months. By April 2001 it was back at $3.12. Along the way it bought an online gaming outfit called Bottle Rocket in August 2000 and paid $32 million in stock for Intellocity in March 2001, which is what a company does when its own currency is inflated and it knows the window is closing.

In January 2001 it sued Disney, ABC and ESPN over their Enhanced TV products. A company that spends a decade failing to commercialize its own patents and then sues the people who did commercialize something adjacent is not necessarily wrong on the law, and it is always a signal about where the business has got to. The other signal was Liberty Media, which had been buying in since 1999 and by 2002 held around 16 percent, in a company whose remaining strategic value was to be consolidated with other things Liberty owned.

~ what it became ~

The ending was negotiated twice. In May 2002 ACTV signed a letter agreement with Liberty at $2.00 a share. The exclusive negotiating window was extended to 15 August and the price came down to $1.65, which is what happens when the buyer has time and the seller does not. Then the structure changed again: rather than Liberty buying ACTV directly, OpenTV, which Liberty controlled, absorbed it in a stock-for-stock merger that completed on 1 July 2003. Wink Communications had gone through the same door a few months earlier.

What OpenTV assembled out of ACTV and Wink was supposed to be the complete interactive television company, holding the middleware, the enhanced broadcasting and the targeted advertising patents together in one place. It did not save any of them. The idea that survives is the smallest one ACTV had: individualized commercials, so that different households watching the same program see different ads. That was ACTV's Digital ADCO subsidiary in 2001, it never worked on cable at the scale required, and it is now the entire economics of streaming television. Fourteen years too early, on the wrong wire.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »