DEVELOPMENTS IN INTERACTIVE DIGITAL TELEVISION

Key applications

• While this report focuses on what we believe will be the key areas for interactive digital television there will also be numerous niche applications developed, for example enabling users to vote in local or national elections or to apply for state benefits.
• The degree of interactivity will be limited at first. Services may not compare well to internet applications accessible through a PC, but it will be important for applications developers to work with the medium to achieve the level of service demanded by consumers.

Take-up of services

• At present around 10% of UK households receive digital television, either through satellite, terrestrial or cable services.
• The analogue signal should be switched off between 2006 and 2010, provided that 99.4% of the population is able to receive the digital signal and 95% have subscribed to a digital service.

Retail services

• Home shopping will account for 9% of total retail sales by 2004 suggesting a total market size of UKP22 billion.
• Shoppers may be unwilling to shop via their television without first checking the product in a physical store, and many are worried about a lack of post-purchase support.
• Products which can currently be purchased via interactive digital television include groceries, books, CDs, videos, toys, mobile phones and household goods.
• The main service available at present is Open?

Gambling services

• The privacy of the home environment and the possibility of learning how to play are likely to expand the traditional market for gambling to include a greater proportion of women and younger people.
• Convenience and on-demand access to sporting statistics will allow bookmakers to capture revenues from spontaneous and smaller bets.
• Blue Square is focusing on digital TV services due to the government?s review of tax-light offshore gambling regulations.

Banking services

• Banking is one of the first interactive services offered via digital TV, partly due to the fact that HSBC is a shareholder in Open?
• Services are currently limited to account information and loan/mortgage quotes, though these will be extended during 2000 to include transactions.
• Two months after launch, Open? had received 80,000 requests for set-top box banking information, of which 62.5% were requests for full TV banking.

Information services

• Interactive information services are one of the less well developed areas of digital television.
• It is not always clear where revenue opportunities lie here, and it is therefore likely that the initial developers of services will either be public service broadcasters, or content producers experimenting with new delivery channels.
• Revenue opportunities may arise if there the consumer can be persuaded to make a purchase of a related item; for example offering background information on a nature documentary could also lead to the user buying the book which accompanies the series.

Games services

• Games have lagged behind in the interactive TV development cycle even though it was one of the first areas to be seriously investigated.
• Areas in which games applications are being developed include interactive game shows and sports applications, with future developments being planned in areas such as education and music.
• Viewers can take part individually, against others in their own home or across the networks against other competitors.