Surf the 'Net on TV
Study says interactive television headed for boom
By MARC GRASER, July 27, 1999
The interactive television service industry, driven by players like DirecTV to OpenTV, could generate $5 billion in sales by 2006, according to a new study released Monday by Silicon Valley-based marketing consultant Frost & Sullivan.
As popularity grows and prices fall, interactive TV services are expected to become commonplace in households in the U.S. and Canada, the report said.
Subscriber growth is expected to take off around 2001 with the launch of an open-cable standard, reaching 20 million people by 2010.
Interactive TV services allow viewers to use digital set-top devices and onscreen displays to get more information on actors or purchase show-related items, as well as order movies, send and receive e-mail, play interactive games — many of the things currently available on the 'Net.
"As the general public becomes increasingly technology literate, pay-TV service providers are currently marketing comparable products targeting this new generation of customers who are technology-savvy," said Frost & Sullivan telecommunications industry analyst Tess Peng. "Web surfing and e-commerce have become second nature to this generation that looks forward to the next trend in technology, especially if it involves their televisions."
Hook-up hurdles
The report said the lack of user-friendly interfaces and a dearth of customer awareness and education about interactive TV services added to the high cost of equipment could be restraints. A slow approach by established cable TV operators to market the new services also could keep away would-be subscribers.
According to the study, more than 70% of TV households in North America are connected to a cable network. These cable customers are expected to be the key potential market for interactive TV.
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