Entertainment is the key for TV ecommerce

Insurance giant Eagle Star is to join Telewest Communication's interactive television service, which launches in March this year.

Eagle Star's interactive service has been developed by online commerce provider Entranet and aims to eventually encompass video-on-demand.

The role of TV ecommerce is expected to grow dramatically over the next year and featured heavily at the Consumer Electronic Show (CES) in Las Vegas last week. Speakers warned that services will need to be entertainment-centric to be successful.

This view was echoed by Steve Scott, head of interactive channels at Entranet. "Eagle Star understood that developing a digital television platform did not mean simply reproducing what they had done on the Web," he said. "Instead, we have used the entertainment-led nature of television to develop a completely new form of online commerce."

Stan Mo, Intel's manager of strategic products, said: "Over the next several years, developing the infrastructure will be the most important factor. The move to broadcast commerce will need to adopt changes and we expect a lot of consumers to make impulse purchases."

Robert Montgomery, president for the Americas at The Fantastic Corporation, said the so-called killer app for TV ecommerce will be video. "The key app is going to be video. Internet communication is way ahead in ecommerce but limitations are that the product looks bad, there are piracy nightmares and lousy business models," he said.

These limitations make it a "golden opportunity for the TV community to form a creative and compelling environment" for ecommerce transactions, said Montgomery. "Stunning adverts and a great and naturally interactive content will be the key."

A panel of speakers at CES predicted that television will prove more popular for shopping and banking transactions than the personal computer. This was underlined by the announcement from Open, the interactive television service, that it has received more than £1 million sales per week during Christmas. Open, which allows consumers to bank and shop from home, said it has received 127,000 orders since its launch in October.

Morgan Guenther, vice president of business development at Tivo, claimed that the key focus for TV ecommerce will be personal TV. "Personal TV is the killer application. We have to let the consumer decide as they will be the key to increased revenues," he said.