Interactive TV Gaining Acceptance

Televisions may be on the verge of becoming all-around entertainment units in Europe, as Strategy Analytics, Inc. revealed that annual revenues on interactive applications and services should reach $1.8 billion by 2008. Revenues for this year alone will generate $92 million — an increase of 121 percent over last year.

The research found that 16 million Europeans are now using enhanced TV applications, such as background information, online voting, quiz show participation and camera angle selection. Overall, interactive television will be available to 31 million European households by the end of 2002, creating a potential audience of 72 million viewers.

“Interactivity is slowly but surely becoming an accepted part of the television landscape,” notes Nick Griffiths, director, Broadband Entertainment Strategies, of Strategy Analytics. “But the key to success is to use it to create better television, and to forget about surfing the Web on TV. Internet TV is now recognized as a failed concept.”

Enhanced television applications, such as viewer voting and show participation, will account for 48 percent of the market.

European Interactive TV Market Forecast
Consumer Revenues ($M) 2002 2008
Messaging/E-mail 10 234
Betting/Gambling 10 64
Games 36 448
Enhanced TV 35 712
Other iTV Revenue 1 26
Total Interactive TV 92 1484
Source: Strategy Analytics

Pace, working with the Gallup Organization in late 2000, made some comparisons between UK and U.S. consumers and their attitudes toward digital television. A digital signal will not only allow for improved picture and sound quality, but interactive and enhanced data as well, representing a true convergence between television and computer.

Some of Pace’s findings include:

  • Digital TV penetration in the UK has grown from zero to over 25 percent between 1997 and 2000 (a compound average annual increase of 296 percent). U.S. penetration represents approximately 12 percent.
  • “T-commerce,” allowing for the purchase of books, CDs, videos, movie theater and concert tickets, vacation and travel via the television, is running at 45 to 48 percent in the UK, compared to 15 to 20 percent in the U.S.
  • 20 percent of UK respondents named e-mail access as being an important consideration for adopting digital, while 12 percent identified home shopping and banking as being key factors. Only 5 percent of those surveyed in the U.S. indicated that e-mail access would influence their decision, and 2 percent were swayed by home shopping or banking.

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