TV Stations Set to Test Direct Digital TV Links to Websites Through Backchannelmedia System

Backchannelmedia Inc., a Boston-based digital television ad serving and response capture company, will announce tomorrow that the Company has successfully completed the first television click-through from a standard TV remote control into an e-commerce site linked to the consumer’s personal home page website ("the Internet back-end"). The company also will announce they will begin trials of the technology, which has been under development for 10 years in anticipation of the 2009 digital conversion, with at least one major market affiliate during Q2 of 2008 and possibly expand to a network owned and operated station group. Backchannelmedia says its system will enable television advertisers to automatically, securely and seamlessly pass the viewer's product or content interest to a dedicated personal web page. The company is privately funded with $9.5 Million raised to date through a seed round. "Contrary to every analyst report, the sky is not falling on TV," believes company founder and co-CEO Michael Kokernak. "TV is changing to digital and TV will remain the dominant medium. The Internet will become the back end data capture platform for digital television."

Demonstrations of the system, the development of which was originally reported by Jack Myers Media Business Report last February, are now being conducted at Backchannelmedia’s Boston-office and engineering facility by invitation only. The company is currently building several "broadcast and cable head-end in a box" transportable demonstration devices and expects to be hosting week long educational meetings at conference centers in New York City and Los Angeles in Q3 of 2008.

The Backchannelmedia system is designed to work with the vast majority of e-commerce, content web sites, and video portals. The solution requires minimal configuration of the technical environment for broadcast television stations and cable networks and can work with most television media buying software already installed at thousands of advertising agencies and advertisers.

With Backchannelmedia’s platform, a consumer watching a live TV show or a recorded show from a DVR, without interrupting the viewing experience, will be able to click and transfer information in advertisements or content directly to a personal and customizable home page set up by consumers hosted on the Internet outside of the television platform, similar in look and feel to many of the Internet’s popular home page web sites. Products can then be ordered securely through the consumer’s existing favorite websites in a familiar and safe environment, and content can be downloaded, purchased, bookmarked, and/or viewed on the web with the simple click of one button on the TV remote. “We expect to test launch in 100 homes and grow to at least 2,000 homes as quickly as possible, then hopefully 10,000," says Kokernak.

While the Backchannelmedia system offers promising technology, there are significant hurdles with cable operators. "Since we involve consumer 'opt-in' approval we are going to take the first baby steps at a reasonable pace so we get it right from the beginning," comments Kokernak. While we are launching in over the air homes first the solution is a software solution that could reside easily in direct broadcast satellite, cable, or other forms of distribution after a launch on over the air."

Realistically the cable industry is not receptive to new technologies that require solutions in the set top box. But, says Kokernak, "our goal is to educate the industry that there is an alternative to today's commercial ratings per minute or even commercial second by second currency and there are competitive solutions to the encroachment of the Internet. By clicking and bookmarking to the Internet, the Internet becomes the back-end for high definition television. It's a simple solution that consumers understand."

"Our solution solves the riddle of getting consumers content where and when they want it,” said Dan Hassan, Co-CEO of Backchannelmedia," and will become the definition of advertiser engagement as moving consumer interest from TV directly to the linked Internet back-end satisfies Madison Avenue’s desire to deliver integrated marketing messages tailored for the consumer. Plus broadcasters and advertisers will be able to work together to determine the appropriate TV click through rates free from today’s limiting online text link auction environment."

Hassan says Backchannelmedia's solution was designed to work with most technologies already installed within the nation’s broadcasting and cable facilities as well as work with current advertising industry work processes thus insuring a clear path to conversion of United States television platform to include the "TV click to the Web" consumer touch point as well as open up scores of new revenue opportunities for broadcasters as well advertisers. The launch is utilizing over-the-air-through set-top boxes supplied by Backchannelmedia. The solution is ultimately for cable and satellite operators but with the October 2008 retransmission consent deadlines looming, Kokernak believes it is important to get out in front of retransmission consent and show broadcasters and operators what the experience will look like.

According to Kokernak, Backchannelmedia’s four extensive patent pending applications were designed to leverage existing technologies such as the TV remote and broadcast and cable automation systems to bring accountability to television advertising. The Backchannelmedia "opt-in from" consumers solution was designed to build upon the relevancy of the television platform, which the Company believes is the backbone of the nation’s communications infrastructure, by insuring that Internet design challenges such as click fraud, dead and irrelevant search links, copyright ownership, spam, phishing, and blind behavioral targeting will not cross over into the wireline and wireless digital television spectrum delivery platforms.

“Backchannelmedia sees a world of tightly bound content forever fusing the digital television platform to its Internet back-end," Kokernak explains. "As the velocity of fragmentation continues to increase and edge gateways become increasingly frictionless this fused link will result in increasingly personalized, addressable, and accountable content and advertising for both the digital television platform as well as the Internet back-end. All digital television platforms will grow, from cable, broadcast, direct broadcast, to telcos, as the delivery of content and advertising will become efficient and tremendous value will be unlocked for these very platforms as well as a new world will be unlocked for consumers.”

Kokernak argues "the television industry needs to stop looking longingly at the past and start focusing on the future. The digital transition spells the next Golden Age of Television. Plasmas filled with high definition TV content will feed data directly into the Internet back-end. It will be incredibly difficult for some Madison Avenue shops to go through the process of reengineering their entire business," he adds. "The industry will become polarized, and has been polarized behind closed doors, as some executives are not prepared for the coming change and some are simply ignoring the facts. But at the end of the day Madison Avenue is here to service its clients and those who don’t embrace the digital transition may find themselves scrambling to catch up to the more nimble open minded shops."

For more information, visit www.backchannelmedia.com or contact Dan Hassan at dhassan@backchannelmedia.com.

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