Digital, Interactive and Web TV

Advantages

[Consumers] [Service Providers] [Content Providers] [Retailers] [Manufacturers] [Advertising Industry] [Government]

Consumers

• Choice: Depending on the provider, today's subscribers can access over 50 channels, (over 100 including carrousel pay-per view movie channels). Within a few years viewers may well have access to over 200 channels.
  • In the US, local community stations are common, keeping their viewers in touch with local news and events and providing local companies with access to their "home" market.
• Better Pictures: No more ghosting, snow or other degradation. The picture received will be at the same quality as sent from the studio.
• Wide Screen: Viewers with new widescreen TVs will be able to take advantage of the higher proportion of widescreen format (16:9 or 1.77:1) material included in digital TV broadcasts. Many films originally made for the cinema will now be able to be shown as intended by the director.
  • The normal ratios for cinema presentation are either 1.85:1 or for CinemaScope at 2.35:1. The 1:85:1 film will be just slightly trimmed. CinemaScope involves more cropping and the TV companies will still need to pan the original film shot but nowhere as much as for current TVs.
• Multi-track Dolby® Sound: Initially UK digital TV will broadcast a digital 2 channel stereo sound that is comparable to the current Nicam system. For the future full 6 channel Dolby® surround sound will be possible.
• Multiple Languages: The extra bandwidth of digital TV allows programmes and films to be broadcast in a variety of languages.
• Advanced Teletext: Digital allows teletext with different fonts and sharper graphics and pictures. It also has easier navigation and faster response. Whilst not yet as advanced as PC displays it brings a step change in quality. The higher bandwidth should provide much more opportunity for advertisers to have their own pages or to sponsor the standard pages. When linked with Web-TV, advertisers will be able to link these rather static pages to the more dynamic web.
• Advanced Electronic Programme Guides: These could include sophisticated search engines, perhaps using a natural language interface, the means to personalise and store search profiles for each member of the household, to auto switch on or auto recording when a programme matching the profiles starts, providing additional background information about the programmes, and a reference library of all recordings made, etc.. See Electronic Programme Guides.
• Interactive Services: Digital TV provides the basis for interactive communications with friends and family, the local community, businesses, pressure groups, societies, and government. It provides an interactive window into the world's expanding collection of electronic information databases, assisting family members with their homework, study, work, and hobbies and interests. See new services.

Service (Delivery) Providers

• Reduced License Fees: As an incentive to providers to invest in digital TV, the ITV license payments will fall from £363 million in 1998 to £292 million in 1999. Further reductions are possible as additional discounts are gained as more viewers switch to digital services.
• Lower Operating Costs: Digital services cost less to operate as many digital signals can be squeezed into the space occupied by a single analogue signal. The savings are particularly large for satellitte systems.
• Enhanced Profit Stream: Once the capital cost has been recovered, profits will rise sharply.
• Increased Advertising Revenue: Digital set-top boxes allow providers to gather accurate viewing habits on which they can match with demographic data. They can then use this data to more accurately promote their own services. The same data can be used to offer premium advertising rates in return for broadcasting the advert when the target audience has a propensity to watch. Ultimately, the set-top boxes could be individually programmed to receive and show only certain types of advert, even perhaps storing the adverts and showing them the next time the viewer switches on.
• Revenue from New Data Services: These will be delivered via the new digital teletext service or via web-tv. Income will come from a mix of viewer premium subscriptions, pay-per-access, and advertising and sponsorship.

Content Providers

• Revenue from Archive Material: With 50 plus years of broadcasting the content providers have amassed a huge archive. New technology allows old recording to be enhanced by removing scratches and noise and by bring colours vividly back to life. Current analogue TV channels are now at capacity with 24 hour 7 day broadcasting but the numerous digital channels provides a welcome outlet for such material. Nostalgia is big business.
• Revenue from Movies: These have always been popular, with many people wishing to see blockbuster movies and famous stars yet again. Once again, the film studios have amassed a huge archive. Digital TV, especially cable with its potential for programmes on demand, provides viewers with a convenient and hassle free way to view movies. No more need to go out on a cold winter's evening and drive to a video rental shop - and then have to take it back the next day.
• Re-packaging the News: Many of the content providers have the backing of news media groups. SkyDigital for example is backed by News International. Digital TV provides the opportunity to re-package this information for specialise channels. For example, business channels, financial markets, industry sectors, geographical markets, etc..
• Educational and Information Revenue Streams: The concept of life long learning is fast gaining recognition but given the 1,000 of possible courses and topics it is not really practical to use the mass broadcasting media. Currently such programmes tend to be broadcast overnight (for video taping) or distributed directly via video tape and these methods have copyright problems. Digital TV with its numerous channels and its subscription and encryption systems, provides a way to broadcast such material as a revenue stream. Expect to see many universities and business schools delivering over digital TV.

Retailers

• Sales of New Digital Sets: BREMA estimate that digital TVs worth £600 million will be sold in the year 2000, and that 10% of UK households will have a widescreen receiver by the end of that year. By 2002 they estimate 5m homes will be receiving digital TV with half of those purchasing a new digital TV and the remainder a set-top box. Currently large screen digital TVs cost circa £1,000 compared to over £300 for analogue models.
• Sales of New Digital Videos: To gain the best quality recordings and the ability to simultaneously watch one channel and record another, consumers should invest in digital video recorders. It is likely that the DVD laser disk players and medium will become the standard for recording digital programmes.
• Sales of Enhanced Set-top Boxes: Meanwhile, whilst the initial set-top boxes are being subsidised, expect to see boxes with enhanced functionality being sold at a premium price. Such boxes could provide enhanced data services including the internet and e-mail, multi-tracked stereo sound, on-line shopping, multiple choice of viewing position at sports events, advanced interactive teletext, programmable timers with links to the video, and the means to update the software to support new services.

Manufacturers

• Supplying Retailers: TV sales in the West have reached saturation point. The launch of a new generation of digital TV provides a substantial filip that will accelerate sales throughout the supply chain.

Advertising Industry

• Much Cheaper Advertising: An advert on normal ITV costs an average of £50,000. On Sky analogue it is around £17,000. On digital it could be as low as £1,000 for a 100 slots.
• Highly Targetted Advertising: Digital TV provides the opportunity to target more precise audiences, eventually possibly down to an audience of 1 - true One to One Marketing. 
• Interactive Adverts: A new generation of interactive adverts will really engage the recipient thus increasing the propensity to buy. Interactive digital TV provides the basis for conducting Mass Customisation - unique products or services for individual customers all at a mass produced price.
• See later section What are the implications and possibilities for the advertising industry?

Government

• New Mobile License Sales: When the vast majority of homes have switched to digital TV then the government will be able to license the frequency spectrums for mobile communications - a rapidly expanding communications medium that is supporting any time, any place, any how lifestyles.
• Government Direct: The UK government is committed to a programme called variously ‘Better Government’, ‘Modernising Government', and ‘Modernising Britain'. One personal objective of the Prime Minister is to streamline bureaucracy, with 25% of Government services delivered electronically by the year 2002. Digital TV, along with PCs and kiosk systems, is a key platform to delivering services to a large proportion of the population.

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External Resources
 

1. See the full list of resources for this web site for other related resources.

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