I Have Seen The Future, And It Urp!Larry Armstrong
Sooner sets down his beer, glances at the TV screen, and punches a prediction of the next play into the remote control on the bar. The quarterback snaps the ball, and Sooner's out of his seat yelling in delight. He's called it right, and the play vaults him ahead of two dozen competitors on a recent Monday night at Stuart Anderson's Black Angus Restaurant in Burbank, Calif.
For Sooner--the handle he typed in at the beginning of the season--it's now a weekly ritual to play the game, called QB1, with his buddies during ABC's Monday Night Football. All those nights were just the warm-up: On Super Bowl Sunday, more than 35,000 sports fans will show up at some 1,500 bars and restaurants for an epic session of QB1.
This is interactive TV, the stuff of dreams for such giants as Time Warner, QVC Network, and Bell Atlantic. For most Americans, it's mainly hype. Yet for a growing group of barflies, interactive TV is reality, thanks to NTN Communications Inc., a tiny, publicly traded Carlsbad (Calif.) company. "For all the talk," says James Hartke, an analyst at New York's Laidlaw Equities Inc., "NTN is still the only game in town."
After accumulating $25 million in losses, NTN also seems close to scoring. It just reported its first profitable quarter and figures 1993 revenues doubled, to around $11 million. It runs interactive programs 14 hours a day, and it has cut 40 licensing deals for its programming. "There is no question that we were the pioneers of interactive TV," says Chairman Donald C. Klosterman.
BINGO AND BENNIGAN'S. Just five years ago, Klosterman was simply hoping NTN would survive. A former general manager of the Los Angeles Rams, he teamed up in 1980 with two other sports executives, Patrick J. and Daniel C. Downs, to develop QB1. In 1983, with a $1 million loan from Time Inc.'s Home Box Office, they founded NTN to beam interactive TV programs into homes.
But after Time Inc. wrote off its money-losing TV-Cable Week magazine later that year, HBO pulled out. The founders ended up working without paychecks for three years: All of them lost their homes. Desperate, they decided to build an interactive network themselves, starting with football in bars. "We wouldn't have to convince consumers to buy an expensive set-top box--and we knew we could make a profit there," says President Pat Downs. Digital signals are beamed to bars by satellites, and players' scores are returned by telephone to Carlsbad, where NTN can rank players nationally.
The company charges bar owners $595 a month for its programming, which includes trivia contests and baseball-linked games. "We wouldn't have invested in it if it didn't give us an attractive return on investment," says Alan Fronke, an executive at American Restaurant Group Inc. in Newport Beach, Calif. The group has more than 100 NTN systems in its Black Angus and Spoons chains. Other subscribers include the Hilton hotel chain, and Bennigan's restaurant group.
NTN has more plans, too. The company is testing "Triples," where cable-TV subscribers play for points during broadcasts from California's Los Alamitos Race Course. It also just formed a subsidiary to profit from the legalization of home wagering on horses in seven states, including New York, Pennsylvania, and Kentucky. International Wagering Network, or IWN--pronounced I Win--hopes to handle the wager from the swipe of the credit card on the set-top box to the pari-mutuel machine that tallies the bets back at the track.
IWN is also eyeing TV Bingo, which it wants to run in cooperation with churches. Racetracks, bars, and churches: The interactive biz--and NTN--are certainly attracting some intriguing players.