Jumping off my Citrix bandwagon to my Gemstar bandwagon ...
This is a press release from Forrester Research I don't remember seeing. When you read about the billions of dollars about to be captured by electronic program guides (EPGs), be aware that the intense interest in Gemstar is about their proprietary EPGs.
--Mike Buckley
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Company Press Release
Interactive Television Will Generate $20 Billion in Revenues by 2004, According to Forrester
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 4, 1999--Television networks, cable and satellite operators, producers, and advertisers agree -- interactive television (ITV) is inevitable. ITV will be the next wave of the interactive commerce gold rush, according to a new Report from Forrester Research, Inc. (Nasdaq:FORR - news) that estimates that interactive TV will generate $11 billion in advertising, $7 billion in commerce, and $2 billion in subscription revenues by 2004. The prime beneficiary of these cash flows will be the early movers -- cable and satellite operators.
``Interactive TV has gone from being a laughingstock to becoming a potentially massive revenue generator,' said Josh Bernoff, principal analyst for Television Research at Forrester. ``As an advertising medium, it will rival the Internet within three years.'
Three applications will transform ITV's revenue stream into a torrent: electronic program guides (EPGs), enhanced broadcasts, and TV-based Internet access. EPGs will be the vanguard of ITV, reaching 55 million homes by 2004. Advertisers will rush to reach viewers through EPG banner ads, info pages, and buttons, generating $3.2 billion in advertising and $1.1 billion in commerce within 5 years. [Buckley's note: Gemstar will share in the advertising and/or e-commerce revenue, depending on the contract they negotiate.]
Enhanced broadcasts will build more slowly, eventually pouring into 24 million homes in 2004. The interactive programming in enhanced broadcasts, like play-along game shows and special events with enhanced content, will build viewer loyalty and create new commerce opportunities. Forrester believes that enhanced broadcasts will generate $6.2 billion in advertising revenues and $3.8 billion in commerce by 2004.
Finally, five years from now, TV-based Web browsing in 13 million homes will generate $5 billion in revenues from subscriptions, advertising, and commerce.
The majority of ITV's revenues will go to cable and satellite operators and technology vendors like Wink, Liberate, Microsoft, and America Online. Meanwhile, interactive TV will do little to correct the broadcast networks' overall ratings and revenue decline.
``Interactive television will turn the media industry inside out, with EPGs touching more Americans than any other media property,' added Bernoff. ``As ITV sweeps across the consumer landscape, it will pull advertising dollars away from existing media, including television and the Web.'
ITV's revenue streams depend on consumer devices that bring interactivity into people's living rooms. First, cable and satellite operators will install set-top boxes that deliver digital video and program guides, swelling the pool of potential interactive TV consumers. Meanwhile, consumer electronics companies will offer a variety of new boxes -- TVs, personal video recorders, and digital game consoles -- that provide further access to interactive opportunities.
For the Report ``Interactive TV Cash Flows,' Forrester interviewed executives from more than 60 companies, including broadcast networks, cable networks, cable and satellite operators, advertising agencies, producers, and technology vendors. More than a third of the networks interviewed have ITV plans in place.
Forrester Research is a leading independent research firm that analyzes technology change and its impact on business, consumers, and society. Forrester's ``whole view' of the Internet economy enables clients to weave together Internet commerce initiatives with corporate systems to satisfy the customer's changing needs. Clients receive continuous research and analysis through Forrester's unique eResearch reports, an array of advisory services, and topical events. Established in 1983, Forrester is headquartered in Cambridge, Mass. The Forrester European Research Center is located in Amsterdam, Netherlands. Additional information about Forrester Research can be found at www.forrester.com. |
