Thursday, September 22, 2005

FOD for Thought

If you ever visit the Poipu Beach area in Kauai and watch digital cable (Oceanic Time Warner), you'll find something that might intrigue you. But trust me. It will only disappoint--at least on that island.

While I was flipping through the on-screen channel guide one late night last week, I came across the "Pizza on Demand" Channel at the end of the 900 channels.

My first thought? Brilliant! Not only could restaurants take web orders, but now pizza places were taking DTV orders. Food-on-Demand (FOD), if you will.

Think about the possibilities. You can see the list of toppings and crusts on your TV screen. Specials can change on the fly, based on time of day and recently viewed shows. Quick questions to test new product concepts. The system automatically routes your order to the closest location. No yellow pages. No maps to figure out which pizzeria might actually deliver to your area. No phone calls. No more questions like "Do you have bacon as a topping?" Just tell your TV what you want and your food arrives ~30 minutes later on your doorstep.

Before I selected the channel I was already imagining other possibilities. After you order your pizza using the on-screen menus, you then have the opportunity to order a VOD movie at a reduced rate. The movies are not listed in random order--movie companies bid on movie placement just like GoogleAds. If Pizza Hut has a tie-in with a movie, you can rent that movie at a deep discount. The possibilities seemed endless. I was excited, and I didn't even want pizza. How pathetic is that?

The reality? Brutal. When I selected the "Pizza on Demand" Channel, a green box appeared with the phone number for Pizza Hut. I guess the feature eliminated my need for a phone book and map, but I was very disappointed based on my visions of pizza delivery grandeur.

Since I was so disappointed, I did a little bit of research after I came back from vacation.

Turns out that I was on the wrong island. You can order your pizza on TV if you're on Oahu, where you've been able to place t-commerce (TV commerce) pizza orders for about five years. Five years! How come I haven't heard about this before? This feature is not available on Kauai, which isn't surprising since you can't even place an online order at Pizza Hut from the Poipu Beach area.

According to an article by Jonathan Blum in Technology Investor (Sep 2000),
In early VOD installations, like Time Warner’s Oceanic Cable in Hawaii, Pizza Hut does a bang-up business from set-top box orders prompted by ads accompanying VOD movies.

“Set-top box ordering encourages viewers not only to order, but to order more,” says Robert Montgomery, president of Prasara Systems, the VOD software enabler who did the programming for the Hawaii install. “Selling-up high value pizza toppings and sodas is much easier with a set-top box than on the phone.”

Here's more from an article by Steve Donohue in Multichannel News (5/3/2004)
Oceanic uses Navic to add interactive overlays to commercials from Pizza Hut and other advertisers. Customers that click on an overlay on the bottom of the screen are switched to channel 999, where they can choose from a variety of pizzas and toppings. Oceanic - now collecting 500 to 600 pizza orders per week - has found subscribers spend more money on a pizza when they buy it through the television than when they call in an order over the telephone. "There's an interesting phenomenon," Smith said.

He said the average Pizza Hut order in Hawaii taken over the phone costs $16, while orders taken through the television run about $24. A typical phone order might be for a large pizza with one topping. But customers tend to add more toppings when they have a wide menu of options on their television to choose from, Smith said.
"That just shows you the power of visually being able to feel these various options -people order more," he said.

Oceanic, which collects a fee from Pizza Hut for every order it processes, is looking to expand in the next few months to a full food court that will offer subscribers takeout or home delivery from a wide variety of restaurants, Smith said. The cable system will also launch a TV-based "shopping mall" later this year that will allow digital customers to order compact discs and other retail products with the click of a remote, according to Smith.

Time Warner recently expanded the channel capacity on its decoders in Hawaii from 999 to 1,999 channels, using many of the new channels to house longform video-on-demand ads. For example, when it runs local ads for Mercedes-Benz automobiles, customers who want more information can click on an interactive overlay that takes them to a channel where they can take a car out for a "virtual test drive." Oceanic's Channel 912 houses video classifieds. Subscribers can view help wanted ads from employers. A local real estate company that buys 30-second spots on Oceanic uses another channel on the system to offer listings of available homes and virtual home tours. Subscribers click on interactive overlays that run within the ads.

Disclaimer: I am not affiliated with Pizza Hut, Time-Warner nor any other company presented in this entry. No compensation. No advertising. Nothing. I have eaten Pizza Hut pizza in the past, but I have not had their pizza in years. (I'm including this disclaimer only because I happened to write about Pizza Hut twice in three weeks. I know that if I was a frequent reader, then I might be suspicious.)

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