This could be good news for LDDI..........
Granada jumps into web-TV fray
E-finance: special report
David Teather, media business correspondent
Wednesday April 19, 2000
Granada Media Group yesterday announced plans to shift the battle for Britain's internet users into the living room by providing full web access via the television.
The group which owns the Granada, Yorkshire, Tyne Tees and London Weekend ITV franchises is launching the service in July with a new, as yet undecided, consumer brand. A free set-top box would render web content for the TV screen and allow access to any content that could now be accessed by personal computers, the company said.
Many analysts believe that internet access moving to the more ubiquitous TV could have a dramatic effect on use of the net.
Users who enter the web through the Granada service will go through the home page of G-Wizz, the internet service provider the group launched three months ago.
"This really plays to the government agenda of getting over the e-divide," said Steve Morrison, chief executive of Granada Media. "Up to now, home internet access has been restricted to those who own computers and an estimated 70% of UK homes are not yet online. We are offering anyone who has a TV and a phone the opportunity to get online."
In a somewhat unusual business model, the company will offer access free of subscription charges in return for users filling in a monthly online survey of their spending habits. The data collected will then be sold on to the marketing departments of fast moving consumer goods companies. Time spent online will be charged at local call rates.
The venture is being launched in partnership with PowerChannel, an internet-based consumer research group which will subsidise the cost of the set-top boxes. As part of the deal, Granada is taking a 23.5% stake in the company for œ13.5m.
The set-top box is similar in appearance to the hardware used by pay-TV subscribers. The box is plugged into the TV at one end and into a phone socket at the other. The set top boxes will be available for a œ30 returnable deposit from any of Granada's 440 rental stores or direct from the company. An advertising push carrying a direct phone line will be launched in the autumn.
Mr Morrison said the service would accelerate the growth of e-commerce. "Because we are using a consumer friendly route that people are familiar with they will start buying over the web," he said.
Revenues from advertising, e-commerce, sponsorship and data sales will be shared between the two companies.
The theory that consumers will feel more comfortable buying goods and services from TV sets than they are via computers appears to be borne out by the experience of Open, the online service available on Sky Digital.
The Open service is a so-called "walled garden" and offers access only to a selected number of content providers including supermarket chain Asda, electrical goods retailer Comet, travel firm First Choice and insurer Cornhill. The service claims that more than 450,000 people have registered for e-mail services and that in the run-up to Christmas e-commerce revenues were running at up to œ1m a week.
In a recent note, Mike Hilton, media analyst at ABN Amro forecast the service could have 3m active users by the end of the year suggesting that e-commerce will find a more natural home on the TV than the PC. |
