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Summary:

The TV show American Idol is the example often used when showing the potential popularity of how text messaging can be used with television shows–mobile and interactive TV company Telescope Inc. says it managed 580 million combined phone and cell phone votes for American Idol’s last […]

The TV show American Idol is the example often used when showing the potential popularity of how text messaging can be used with television shows–mobile and interactive TV company Telescope Inc. says it managed 580 million combined phone and cell phone votes for American Idol’s last season!

American Idol has proved that Americans love text-to-vote – though making money off that has been a bit of a thumb-cramper for companies managing the process. The carrier walked away with the bulk of the 10-cent text fee, the Show got the viewers, but those doing the heavy lifting got bupkiss. Or at least not as much as they would want.

So what do these start-ups do – push a new concept in SMS voting called, Premium SMS — a text message that costs more to send but that the viewer gets something (or the illusion of something) in return.

Edward Boddington, CEO Telescope Inc., says “premium SMS is the future of ‘participation TV.’ His company, owned partly by Bertelsmann and Harvest Media Group, is managing SMS voting for shows like American Inventor (Bullet Ball!), Hell’s Kitchen, Rockstar, and American Idol. (He’s the one in the picture shaking hands with the American Idol announcer.)

Premium SMS can cost the viewer between 50 cents to 99 cents and the consumer gets either a bit of digital content in exchange or, say, gets a chance to be entered in a sweepstake. That business looks a lot more attractive to a company like Telescope than a regular low cost text-to-vote campaign for a carrier. The Wall Street Journal (WSJ) has a bit about this growing market in today’s paper.

The major problem with this move is that with a higher fee for texting, inevitably some users will balk at the high cost. I definitely wouldn’t pay a buck to vote on Hell’s Kitchen in exchange for a sweepstake. But then again, I’m not the lottery ticket kind–a lot of people are. Of course there is that nagging little bit – people’s tastes change and this whole reality TV thing might be over. What happens to companies like Telescope then? They also manage mobile marketing and other mobile content, so they’d probably survive.

The WSJ seems to be pretty bullish on the popularity of premium SMS for interactive TV. Naturally so is Telescope. Edward says “if it’s packaged in the right way, consumers will definitely pay that much,” he says.–What do you think? Would you be willing to pay a dollar to text TV?

  1. I’ve got some serious reservations about how they are promoting these “contests” on the show and can’t help but wonder if we are seeing a fleecing of consumers by network executives. I don’t mind that they make money off of the texting, but the reality is that if consumers are paying $1 to enter a contest for $10,000, then it needs to be disclosed that they don’t even have a 1 in a million shot at winning. My take on this is that consumers are better off playing the lottery and view this as very unethical by the execs and their supporters. Specifcally, I think that Genworth is being irresponsible with their promotion of the Treasure Hunters contest by supporting what amounts to a very low probability gamble instead of making a good recommendation. Given their expertise in finance, if they are willing to support this type of scheme, I have to wonder how much they are willing to rip off consumers when it comes to their financial products.

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  2. In Europe, TV channels have had premium SMS based shows for quite a long time. Voting and fundrising are typical use cases for the service, but more interactive TV shows such as dating and games have also been around for ages. These are usually aired very early in the morning or at night and they are surprisingly popular – the rate of one premium SMS (50-100 cents each) arriving every couple of seconds is not uncommon even in a small country like Finland.

    There is something addictive in sending an SMS and seeing it on TV a few seconds later :) I have tried the interactive games a few times and once you start, you can say goodbye for 10-20 dollars.

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  3. TV Game show based Premium SMS is already big in countries like India…Its very very lucurative and kinda like running your own lottery!.

    To encourage as many people to SMS and at the same time to be within the legal boundry (prizes should be awarded for skill not chance) the viewer questions are very easy/obvious like “who is the president of US?” :)

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  4. Francesco Cardi Thursday, July 20, 2006

    Interesting article. I´m quite positive in premium SMS. Here in Europe there are many successfull examples. Regarding the issues of end users getting upset very easily in paying high fees, well, the secret is to be creative. If companies like Telescope will be able to continously invent new formulas / mechanisms to attract customers, success will be guaranteed.

    Finally, just a note on the article style: thumb-cramper, bupkiss … come on Katie, you have an international audience ;-)

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  5. OK, I’ll officially never use bupkiss again. I was channeling my grandfather. ;)

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  6. In India, a lot of FM Radio Stations more than TV shows use this all the time for special promotion prizes and regular on the hour polls with special gifts etc.

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  7. The question I have is whether this will be embraced by all shows that offer voting, or by selected ones. Will the fact that American Idol would be the one, be enough to overcome voting on something else that would be less expensive?

    But as you say, certain people the idea of being put in a lottery in exchange for a vote. I wouldn’t bother with that either.

    “Idol” and shows like it though sometimes is watched in groups of people. And we know when that happens everybody will push each other to vote and spend.

    Short-term it may do ok, but like you, I’m not sure there is really a future of in reality TV, when TV itself is losing eyeballs continuously.

    Then, as you say, where will providers of these services be then? I don’t see much of an upside either.

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  8. Perhaps it is more interesting that there is not a better revenue split between the show creator, the channel, and the carrier.

    Given all the talk of new media models, perhaps the time to right to vote on shows you see on YouTube, and MySpace through Text, IM, or Voice?

    I think the genius of text is that teens treat it like a conversation with a real person, its akin to gossip, or a popularity contests, and their is no perceived “barrier” to entry (no club membership, no sign up, etc. etc.)

    Companies in Europe are now seeing that it is more difficult to get more meaningful interaction using text, so they are turning to voice based interactive services.

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  9. Not really worth the keyboard they are typed on.

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  10. Paying to text to TV is hudge here in Europe (or at least in the Netherlands). All the TV shows where you can vote via texting cost €1/vote (or so). It’s also often used for micropayments, and, offcource, sexual messages.
    Strange that that isn’t common in the US yet.

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