January 14, 2007, Updated September 12, 2012

TVnGO CEO Kobi Merlin: Our system holds the benefits for the consumer by expanding his TV experience into the Internet world in a ‘TV lean backwards behavior,’ free of charge.Kobi Merlin wasn’t getting much sleep last week in Las Vegas. The CEO of Israeli startup TVNGO wasn’t weary because he was staying up late at the slot machines or the floorshows. Instead he was busy demonstrating TVNGO’s revolutionary hardware and software system that enables Internet overlay on TV broadcasting to the throngs of techies and industry insiders gathered at the annual Consumer Electronics Show (CES) – the world’s largest consumer electronics show.

“We’ve had very good reactions at CES,” Merlin told ISRAEL21c in a late night phone call during a break from the visitors streaming into the company’s suite at the Bellagio hotel.

TVNGO features Internet contents formatted for TV screen (streaming movies, videos, web sites), which can be changed by the viewer with his remote control. Broadband channels and Internet contents are shifted in a seamless manner including situations when blended Internet and broadcasting show a single frame.

“Our system holds the benefits for the consumer by expanding his TV experience into the Internet world in a ‘TV lean backwards behavior,’ free of charge,” said Merlin. “We’ve created unique middleware that can run Internet on any kind of TV system.”

At the same time, Merlin says that TVNGO also offers TV advertisers a new media he calls the ‘Third Media’ – “Non intrusive TV ads with Internet capabilities, low cost, no production cost and no time to air.”

“There’s nothing else like this – we’ve patented the technology and the advertising model. This is the first time that you can advertise on TV using overlays,” he added.

Established over two years ago, the Ra’anana-based TVNGO is actually a joint Israeli-Taiwanese venture, explained Merlin.

“I was the matchmaker – I’ve been in the computer field for more than 25 years, and got to know our partner David Chang, who was the former president of the ECS Group. We’ve known each other a long time, and we came up with the concept of merging Internet with TV overlay,” he said.

“The Israeli side developed all the software for the middleware and back end, and in Taiwan they’re responsible for the hardware, manufacturing and design.”

The TVNGO system has an independent infrastructure which is installed in the house of the consumer. According to Merlin, the only requirements in the home are TV reception via a cable or satellite antenna, broadband Internet service and a telephone landline.

And it’s all free! The company’s direct revenue source is by means of advertising. The TVNGO system places an advertising icon in the upper left hand corner of the screen of the viewed TV show, which can be accessed by the viewer with his remote.

“We’ve done a pilot in Israel through our Israeli marketers Icon TV Media Ltd. where we installed 500 boxes in homes in the Ra’anana area,” said Merlin.

“We give the user a box which can be used like a media center – you can watch all the content that you have on your computer on the TV. We’ve worked with select Internet sites in Israel – like NRG and Nana – over the last two years to adapt their site to TV mode, which is different from PC – it requires some changes in the graphics so users will still get the best quality picture.”

The response has been so positive, he added, that the stage two of testing is about to begin in 10,000 more households in the same area. At the same time, TVNGO has also concluded a deal to integrate its system with digital set-top boxes distributed by BTTV, a cable television company in the Xinjiang Province in northwest China with one million subscribers.

Some 300,000 set-top boxes will be converted in the first stage over the next five years, of which 100,000 will have TVNGO’s complete system installed, and the rest will have part of the system.

TVNGO estimates revenue from sales of advertising will total $7-8 per subscriber per month. Over a period of several years, when the number of installations of the company’s system reaches 300,000, revenue is predicted to reach almost $30 million a year.

As far as the lucrative US market, Merlin said that the demonstrations in Las Vegas are laying the groundwork for the eventual introduction of TVNGO technology into American households.

“We’re in Las Vegas at the beginning stages of preparing the market before we start operating there. We also need to make connections with local content providers,” he said.

With the traffic going in and out of the TVNGO suite at the CES, it’s a good bet Americans will be able to watch Internet content on their TV sooner rather than later.

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Jason Harris

Jason Harris

Executive Director