It amazes me that so many of the people covering this industry don't do their homework. This is an example:
""Forget using the TV as a gateway to the Internet," The Strategis Group's Hamilton says. "Video-on-demand is something consumers want today, and programmers can actually use to bring in revenues.""
Interactive TV Draws Passive Viewer Response
By Karen J. Bannan
March 29, 1999 8:09 AM ET
Technology consumers may be lining up for ever smaller and smarter PCs, phones and digital devices. But when it comes to picking out television sets, buyers like their boxes big and stupid. A general lack of interest in interactive television is stunting application and programming development, possibly making it tougher for the TV set to emerge as the public's main point of entry to interactive media.
Interactive TV is still in its infancy, and the bottom line is that its success may depend on just that - the bottom line. Market watchers say the money is there, but it may be a few years before programmers will be able to find it.
"So far, we just haven't seen a wide acceptance from people to have regular TV be their interactive medium," says Elliot Hamilton, director of U.S. telecom consulting at The Strategis Group , a technology consultancy. "We think that's going to be the case for at least five more years."
Strategis market studies show that only 5 percent to 7 percent of U.S. consumers want to receive Internet content on their TVs, Hamilton says.
Another analyst offers a slightly rosier projection, but he says the interactive connection still has a way to go."Our research indicates 10 [percent] to 15 percent of consumers are looking to use the TV to view material from the Internet or to interact with their TVs," says Bruce Leichtman, director of media and entertainment strategies at The Yankee Group . "While this is a small number, it does show a hint of the promise of the interactive TV potential."
The lack of momentum behind interactive TV could make it difficult for content providers to get the money they need to further their efforts. The interactive TV programming that is available today, including Wink TV from Wink Communications and SnapFacts from CableSoft, is free to consumers. Forthcoming offerings, such as ACTV's individual TV and HyperTV, also are expected to be free. Analysts say this could set a precedent not unlike the business model that has kept most Web-based content free to users.
Because of this, interactive content providers' best hopes for financial success may lie with selling their services directly to cable and digital broadcast satellite (DBS) operators. For that to happen, cable and DBS providers would have to see interactive TV as a way to differentiate their services from each other and from new competitors.
Officials at satellite provider DirecTV say the company's planned two-way satellite communications system will include plenty of interactive content. However, both the cable and satellite industries are still one to three years away from being able to deploy interactive services to all of their customers.
Even when those services do become available, consumers may not have a strong appetite for them. One potential problem with using TV as an interactive tool is that TVs in most households are watched by more than one viewer at a time. This could make individual interaction a tough sell.
Craig Ullman, who carries the title "keeper of the magic" at ACTV, doesn't expect group viewing to be a big problem, comparing it with the use of remote controls on today's TV sets.
"The physically dominant member of the group controls the remote, and the mentally dominant person gives the commands," Ullman says. "We watched people watching interactive TV, and we watched nature play itself out. We don't see this as a barrier for interactive television."
Ullman says ACTV's services will focus on sports-related content when it launches, because sports programming is conducive to group experiences.
Other programming that has a chance to succeed, analysts say, includes the kinds of TV shows that consumers already view as quasi-interactive, such as game shows, talk shows and news reports. But for now, most analysts say the best bet to whet consumers' appetites for interactivity may be video-on-demand.
"Forget using the TV as a gateway to the Internet," The Strategis Group's Hamilton says. "Video-on-demand is something consumers want today, and programmers can actually use to bring in revenues." |
