The New Zealand-based Txtstation is close to signing its first deal with a TV channel in India. The company's head, Matt Coleman, who's made two trips to India in the last two months, declines to divulge details and says the deal will be announced shortly.

But Coleman says that Txtstation has handled live baseball games in the US and asked viewers to SMS their opinions on the man of the match.

"Our response levels have been from 10 per cent to 95 per cent of an audience at a live event. SMS is here to stay with new technologies like 3G making the experience richer."

Txtstation is not the only foreign mobile marketing company that's leaping into India's burgeoning interactive TV market. First Person Media managing director Daniel Mueller is also looking to tie up with a strong local partner to set up operations in the country. Several others too are sniffing around here for business opportunities.

Among them are Finland's Fun To Phone Limited and the UK's First Person Media Ltd. "There are many others on the prowl offering concepts and services," says Ajay Vidyasagar, senior vice president for marketing and communications at Star India.

That's because participation TV has hit India. Consider:

• Four weeks ago, NDTV 24x7 launched a current affairs show 'You Decide,' hosted by staffer Vikram Chandra. The show takes up topical issues and involves the viewer in the panel discussion by asking him to vote on the issue by sending an SMS. As the votes keep coming in, the poll results, displayed on the screen, keep viewers glued to the channel.
• 'Indian Idol,' the ongoing music contest on Sony TV, involves voting via SMS as well as through the internet. Worldwide, the 'Idol' series elicits nearly 100 million responses, generating huge SMS traffic.
• In September, Star Plus' reverse auction for jewellery worth Rs 20 lakh (promoted through its serial 'Kahin to Hoga . . .') evoked six million SMS in three weeks, a response Star India claims was the biggest generated by the network in Asia.

Television channels are turning to interactive programmes that call for viewers sending SMS. But the SMS trickle has now turned into a deluge as channel after channel looks at interactive programmes that involve the viewer more closely with what's on air.

Indeed, the programmes listed above are just the tip of the iceberg. Says Active Media director Raj Singh: "Get ready for a mind-boggling array of interactive shows on the Indian TV screen across channel genres. We ourselves are talking to some broadcasters for handling their participation TV programmes."

Active Media provides back end support for TV channels that opt for SMS-based programmes. The company offers the link between the channel and mobile operators.

What precisely is participation TV? The new type of programmes allow viewers to communicate through the broadcast and actively participate in television shows.

This could be through value-added interactive concepts such as polls, contests, games, quizzes and chats that are integrated with the programmes.

Many believe that the participative TV business here is set to explode. Kim Lindholm, a top executive at Fun To Phone, says that India has a huge potential, considering its impressive mobile subscriber growth and the plethora of TV channels.

While some Indian channels have inquired about SMS-TV full-screen games, the company plans to offer services such as TV chat, vote/poll, quiz and jukebox applications to full-screen concepts such as games.

Worldwide, Fun To Phone's customers include dedicated 24-hour interactive channels (these only broadcast TV chat and SMS controlled games) as well as mainstream TV channels that use its products such as chat crawlers (the band that scrolls across the bottom of the screen).

Television marketing experts say that India has already witnessed the first generation of participation TV with channels encouraging viewers to send SMS on their mobile phones for contests and votes. This is set to change -- programme concepts are being created around viewer participation, which will drive content on air.

Needless to say, India's growing appetite for participation TV has spurred the interest of TV channels and mobile operators in India are increasingly opting for participation TV programmes for several reasons.

For starters, the number of mobile phones almost equals the number of cable and satellite homes -- 40 million. "And it is safe to assume that there will be a huge overlap -- basically duplication of TV users and mobile phone users," says Star TV's Vidyasagar.

From the viewers' point of view, television is a big part of people's lives and if they have an interactive device they will use it to be part of the media, he argues.

Viewers can interact with one another or communicate with the broadcaster via their mobile phones or, if available, the internet, landlines and remote controls. In this way, audiences can directly influence the broadcast and help create the television they watch.

"The popular belief is that such formats work in sports, news and music channels. But tomorrow what stops an entertainment channel from taking a vote on, say, a character in one of its top-rated serials and removing him from the script if he or she is unacceptable," asks Rajesh Sheshadri, senior manager at TV Today. The basic idea is that viewers will dictate content, he adds.

Such TV programmes also push interactions among viewers and functions almost like Instant Messenger on the internet. They allow you to register with a channel and run a message on the scroll below. This elicits responses from other viewers. The format is often used by music channels where people continue chatting on the scroll while the music video plays on screen.

From the channel owner's standpoint, the mobile phone offers a return path with the help of which it can connect with its customers. It drives channel 'stickiness' or the ability to attract eyeballs which can then be brandished before advertisers.

Vidyasagar says that in India no robust data that indicate that such programmes are pushing up channel viewership shares as well exist. "But common sense suggests that they would," he adds.

However, TV marketing professionals say that the biggest benefit is that broadcasters get to capture a huge database of viewers.

"It begins with a simple mobile number, but building on that for a viewer profile is not difficult. Continued interaction on these numbers will generate a wealth of data which can be used in many ways," says the marketing head of a TV channel.

Last but not the least, the entire participation TV exercise is meant to generate revenue. Currently, in India, mobile operators share between 25 and 50 per cent of the revenue generated via SMS. However, in evolved markets broadcasters get to keep nearly 80 per cent of the revenue. But media industry experts expect things to change, especially after Star dived into the business.

Mobile service companies are pleased with the six million SMS the channel's reverse auction of jewellery generated. Explains a Bharti executive: "The mobile to TV interaction for contests is a very attractive business for mobile service companies. It drives SMS traffic for us and the cost of the SMS is often double the cost of the normal customer to customer SMS."

But other mobile service company executives are less enthusiastic. Says Balu Nayar, head, value-added services at Hutchison Essar: "At Hutch, the mobile-to-TV SMS is just about one per cent of our total traffic. But it is definitely growing very fast. Not so much for us but for TV channels is is clearly a new revenue stream."

For broadcasting companies, the revenue potential is huge, especially if advertisers get hooked to exploiting the "interaction loop" (channels have created a short code number for this).

Advertisers can ask for customer response on the channel's number. For instance, a soap or a biscuit brand could run a contest on the channel through its short code number. Star India is already working on this and is expected to rope in some advertisers soon.

Will participation TV succeed in India? Star's Vidyasagar believes that it will only benefit channels with volumes. "A small guy will only get a trickle. It is the surge of volume that makes the business viable," he says.