BW)(SRI-CONSULTING) Cable TV Positioned to Dominate Internet-on-TV
Service Market Long Term
Business Editors, Interactive/Multimedia Writers
MENLO PARK, Calif.--(BUSINESS WIRE)--Aug. 3, 1998--Although few cable-TV operators
offer Internet service for the television today, the cable-TV industry will dominate the Internet-on-TV
service market within the next ten years, according to a new study by SRI Consulting.
Currently fewer then 500,000 consumers worldwide subscribe to an Internet-on-TV service. Most
of these consumers subscribe to WebTV Network's service in the United States, which is delivered
through 56-kbit dial-up modems. SRI Consulting projects that the total number of subscribers
worldwide will grow to 12 million by 2002, with about 60 percent of those subscribers still using a
dial-up service.
Beyond five years, however, cable-TV-based services will catch up and surpass dial-up services.
"Although the cable-TV industry is getting a late start in this market, it has quite a few competitive
advantages over other network service providers that will give it a boost in the long run," said David
Rader, senior consultant and lead researcher on the study Internet on Television. Rader cited the
following advantages enjoyed by the cable industry:
-- The ability to spread the cost of set-top boxes across several
revenue-generating services, including digital TV
-- Strong ties to TV programmers, who can help develop
Internet-on-TV entertainment content that targets TV audiences
rather than simply reformatting Web pages designed for PCs
-- Greater bandwidth, allowing cable-TV operators to speed up
downloads and potentially offers new applications using
high-quality sound and video.
SRI CONSULTING STUDY ON INTERNET-ON-TV
The study notes that most subscribers will expect Internet-on-TV service to be more like an
extension or feature of regular television service than merely a new way to access today's Internet. "This
type of service is not about work, it is about relaxing and having fun even for consumers who already
use a PC online service," Rader said.
One implication of the study is finding that countries with competitive cable-TV industries such as the
United States, Canada, the United Kingdom, France, Denmark, the Netherlands, and Belgium will see
the highest overall penetration of Internet-on-TV service. Other factors that will tend to boost the
market for Internet-on-TV are high overall Internet use and low cost for making local phone calls for
dial-up access.
The study predicts that Internet-on-TV will not follow in the path of the desktop PC in having one or
two large technology vendors dominate key technology and hardware and software development and
interface standards. Instead, Internet-on-TV applications and services will generally be based on
published, non proprietary standards such as HTML and JavaScript.
Although Internet-on-TV hardware will rely on low-cost PC components, Intel microprocessors are
not favored over alternatives because compatibility with DOS/Windows applications is not a high
priority, the study found. Service providers will be highly selective in adapting PC software in order to
maintain ease of use and reliability. They will also tailor the TV interface to their own marketing and
programming needs rather than relying on a one-size-fits-all interface from a software vendor.
About the Media Futures Program
SRI Consulting's Media Futures Program examines the commercial impact of emerging media
technologies through a synthesis of technical evaluation, business and regulatory analysis, and original
user-demand research to give clients a comprehensive perspective on opportunities in new media. The
Internet-on-TV report is part of an ongoing subscription service - Advanced Digital Media - that
provides in-depth analysis of emerging digital information, communications, and entertainment products
and services worldwide in consumer and business settings.
For more information on these programs, readers should contact Steve Baughman (650-859-2365)
or Ed Christie (650-859-2400) in the United States, or Charles Stancomb (44-181-686-5555) in the
United Kingdom.
About SRI Consulting
SRI Consulting, a wholly owned subsidiary of SRI International, combines strategic business
consulting with technology expertise to help companies compete more effectively in changing global
markets. SRI International is one of the world's largest research, technology development, and
consulting firms.
--30--blm/cgo*
CONTACT: SRI Consulting
David Rader/Paul Di Senso, 650/859-2348
or
The Weber Group
Phil Gomes, 650/463-8611
pgomes@ca.webergroup.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED
INTERACTIVE/MULTIMEDIA/INTERNET TELCOMMUNICATIONS
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