The revolution in digital television hits prime time this autumn, when broadcasters get ready to launch interactive digital services.
For the first time, viewers will be able to treat their TV like a PC. Interactive digital TV consumers will be able to surf the web, send email, and pull up text-based information about the programme they are watching – all from the comfort of their living room.
Interactive digital TV has major implications for business, according to research from Microsoft which last week presented the findings of its own six-month UK interactive digital TV service, WebTV.
Microsoft says 67% of WebTV participants considered buying goods online. One-third of participants said they were willing to pay for online shopping and banking services in the future.
This suggests that TV will become a key channel for delivery of ecommerce, a fact recognised by a host of high-profile banks and retailers. NatWest, Tesco, Barclaycard and Lloyds TSB have already participated in separate national trials.
Some of these are now preparing to offer content and services designed specifically for the medium of interactive digital TV. They believe that digital TV will let them tap a market of millions of consumers so far untouched by the Internet.
But companies following in these giants' footsteps face three obstacles. There is uncertainty about which of the competing digital TV technologies they should back, companies face additional costs moving from Internet to TV based ecommerce, and there is uncertainty over when some broadcast services will become available.
Interactive digital TV has generated a lot of enthusiasm because it is expected to herald the beginning of a business-to-consumer ecommerce boom even larger than the one promised by the Internet.
The reason is simple: more people have access to a TV set than a PC – 40% of UK homes have a PC whereas 98% have a TV, according to British Interactive Broadcasting (BIB), one player in the interactive digital TV space.
PCs are viewed as hard to use, unreliable and uncomfortable – christened lean forward technology. TV is seen as reliable and simple to use – or lean back technology.
“This is designed for my granny. She's never had to reboot her TV to get the weather,” says Colin McQuade, technical director of BIB, whose digital TV offering is called Open.
Participants in Microsoft's WebTV trial were selected for being both technically aware and for watching a high volume of TV – about three hours a day. Those who took part, at 115 homes across London and Liverpool, may own a home PC but were unlikely to have used it to surf the Internet, says Microsoft.
Roger Bracewell, head of Internet consultancy at consultant Marlborough Sterling, says TV's ease of use makes it popular with potential ecommerce consumers. He adds that organisations which don't respond to digital TV risk missing out on new customers.
“Even though the Internet audience is growing, it is only tapping into a certain group of the population. Interactive digital TV won't just increase the Internet audience, it will also access a group that today doesn't consider using the Internet,” Bracewell says.
But don't expect setting up in digital TV to be as simple as setting up on the Internet as organisations must overcome several obstacles. First, don't assume you can simply port existing web sites to the TV. Instead, you must spend time and money either redesigning existing web pages to suit TV, or simply start again from scratch.
Companies with Internet presence participating in WebTV tweaked existing pages so they were easier for non-PC literate users to read and navigate.
This meant reducing the amount of text, eliminating scroll bars and using less jargon. Tesco Direct, for example, cut out instructions familiar to PC users such as 'log in' for more user-friendly instructions such as 'shop now'.
John Maroney, Ovum principal consultant, says only businesses which see a huge benefit in interactive TV should undertake these changes to attract customers.
“To make this generate revenue you will have to spend time, money and effort in getting to market,” he says. He adds that this is a lesson those on the Internet are only now learning.
WH Smith, which will launch a book-selling service on BIB's Open this autumn, supports Maroney's view. “We will adapt to the technology and the needs of customers. If that means having to adapt what we have to do to get online then so be it,” says a spokesman.
But changing your content is just the start of your problems. Unlike the Net, which is founded on standards-based technologies, interactive digital TV services use rival technologies. It's like the old VHS versus Betamax argument, companies must decide which they wish to adopt.
Leading contenders at the moment are a proprietary system based on C and C++ code from Open, and Windows, HTML and Java-based offerings from WebTV and Cable & Wireless’ Digital.
Interactive TV works like thin-client computing. The client is a set-top box in the customer's home that process the signal, while a remote server holds the bank's or retailer's business data and presentation pages.
Microsoft says WebTV will use its TV Platform Adaption Kit (TVPak), see Newswire 14 June.
The TVPak client, a set-top box, will run a version of Windows CE.
The TVPak server, operated either by network providers or the company concerned, will run on Windows 2000, SQL Server 7.0, Microsoft Commerce Server and Microsoft Commercial Internet Server. TVPak will be available in the fourth quarter of this year.
Microsoft says TVPak means companies can utilise existing in house Microsoft developer skills, reducing the barrier to entry. But TVPak is relatively unproven.
WebTV UK trials were based on servers running that faithful old operating system, Unix – in this case Sun's Solaris – while set-top boxes ran an operating system based on Assembler. This set-up is used even in the US, where there are 800,000 set-top boxes, although an upgrade to TVPak is planned.
Mike Shaw, WebTV technical manager, says the technology's unproven nature is unlikely to deter take-up as Microsoft's technologies have been proven separately in the workplace. “It's a lot less risk than going for a proprietary system,” he adds.
By which read Open. With Open, companies build TV screens, not web pages, using the Open Author – which is based on C++. Open Author assembles the screen in a style befitting TV.
An Open spokesman says Open's style of presentation suits TV better than WebTVs, which exports web pages to TV. “The Internet was not made for TV. It has different resolution. It's text intensive, which is not good for people sitting away from the TV set,” he says.
A third option is provided by Cable & Wireless with Digital. The system will operate along the same Internet dial-up model as WebTV but will not rely on Windows. However, to suit the new medium, companies will be expected to tweak their existing web sites with advice from C&W, so they can use existing HTML and Java skills.
Bracewell says organisations are waiting to see which technology wins before committing themselves. He advises organisations embracing both the Internet and digital TV to separate the presentation layer from business data, such as databases which contain price lists. If they don't, they will have to completely redesign their online offerings to suit the needs of each medium.
“You will struggle to adapt to new channels,” Bracewell warns.
Businesses might want to book a supplier on the basis of the number of customers each digital TV company attracts. So far, those who offer email and Internet access look likely to attract the most subscribers.
Microsoft's research shows the Internet and email to be the key driver to adoption – 90% of participants said Internet access and email would make them buy WebTV.
Sharon Baylay, Microsoft TV marketing manager, says respondents who had a PC at home but were unlikely to use it for such services, because it was viewed as too complicated. TV-based services, however, were seen as simpler to use.
The industry seems to be moving Microsoft's way. C&W will initially offer access to just 100 web sites deemed to meet the company's standards for performance, ease of use and quality of content. It intends to move on to full-blown Internet access next year.
“We're doing it this way partly to manage demand and ensure that the service to those sites is adequate. Second, a number of retailers don't offer sites that can naturally be redesigned for TV,” says Martin Graham-Scott, head of broadcast communications at C&W.
However, Open will not offer Internet access. The spokesman says consumers want secure, fast and reliable access directly to the relevant service without involving the Internet.
Customers will browse though the broadcast stream (the channel which delivers the actual TV programme, as with Teletext and Ceefax) and when they wish to make a purchase customers press a button on a remote control and go online.
Online access will be via the telephone network. Users will then pass to an Open server that authenticates the customer's identity and passes them on to the bank or retailer's own sever.
“We'll authenticate your set-top box and check it's the right telephone line, and pass you directly over to Woolworth, WH Smith, Argos or whoever. This is more secure, because no credit or debit details go over the world wide web,” says the spokesman. “There is no great appetite on the part of consumers to have web access through their TV.”
However, WebTV faces a further hurdle: it has no launch date. Microsoft takes a partnering approach to IT services, and digital TV is no exception. Microsoft is in talks with an undisclosed number of network operators who will roll out the service.
The network operators will install TVPak servers and supply set-top boxes to customers. However, an announcement on deployment and adoption is not expected from the operators until October.
In the meantime, Open plans to go live in September and C&W will launch services in October, but this will be a regional service initially focused on London and the north-west.
Interactive digital TV has huge potential for business. For the first time, consumers will be able to access online ecommerce services without experiencing PC-fear or climbing an IT learning curve. But there are risks.
Companies could find themselves backing the wrong technology in an unpredictable market, and they must find fresh development resources to support the new medium. For many, says Bracewell, it's a case of getting their Internet offering right first, and then looking at TV.
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