Jupiter Says Interactive TV to Outpace Online Growth

Internet research firm Jupiter Media Metrix , is predicting that interactive television will grow 83 percent by 2005 to reach about 46 million U.S. homes. The rub, however, is that growth would be fragmented in regions as well as globally.

The expected growth rate for interactive, or two-way television is quite accelerated compared to the growth of online households, which the company predicts to grow by 9 percent during the same four-year period.

Jupiter said iTV penetration is expected to ramp up on a regional rather than a national basis, because the infrastructure and technology would not be initially available in every market. As a result, programmers and advertisers would be wise to develop and deliver targeted content and interactive applications specific to regional audiences.

Because geography and technology will create fragmentation across audience segments, developers and content programmers also need to plan for that in their platform development, Jupiter analyst Lydia Loizides said.

The findings are from a Jupiter report about iTV titled “Waiting for Critical Mass: Timing Investments in the Fragmented iTV Market,” which was released today.

Other findings in the report:

  • Although Jupiter predicts that the US will outpace Europe as a whole in iTV penetration in 2005, the lead is lessened when the US is compared on a country-by-country basis. The research outfit said programmers and advertisers with a global presence would be wise to use iTV global penetration to target different audiences.

  • The company said no clear middleware technology platform (i.e., MicrosoftTV, Liberate, OpenTV, PowerTV) would emerge as the leader within the next 24 months. “Platform developers in the iTV market will share leadership, not own it.”

  • iTV cable and satellite households lead through 2005, in approximately 26 million and 15 million households by this time (up from four million and two million, on average, in 2001). By 2005, however, cable will surpass satellite in terms of iTV household penetration. Jupiter analysts assert that programmers and advertisers need to think how to best deliver interactivity — not only across satellite but also via cable since it will reach a larger audience.

  • Jupiter analysts say iTV programmers should continue to invest heavily over the next 12 to 18 months in programs that lend themselves to interactive functionality such as sports, game shows and news. Other types of programming, like drama and comedy, will be more difficult to bring in interactive functionality, but provide an opportunity for dual-screen programming.

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