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[Provider's Interactive Services] [Home Shopping] [Home Banking and other Financial Services]
Part 2:
[Entertainment] [News
and Information] [Sport]
[Education and Government Services]
[E-mail, Teletext & Internet Access]
[Other Interactive Services]
[Examples of Interactive Services]
| BSkyB was first in September 1999 with
its Sky Sports Extra where viewers can interactive with the programme, choosing
viewing angles, instant replays and additional text information. In
November 1999 BSkyB's
Open interactive service was open for business
- the first service to be offered nationwide. It offers information and shopping
services plus email. Open was originally a joint venture between BSkyB, BT,
HSBC Holdings, and Matsushita is now wholly owned by BSkyB.
Major brands have paid substantial sums to be early participants in Open and thus appear on the first shopping page. Special offers, like the one seen on the right for Persil, are common throughout the Open site. In March 2000, Open ran its first interactive TV commercial for the cooking sauce Chicken Tonight. Interactive advertising (click here for examples) and home shopping opens the way for completely new revenue models. See Managing Change's presentation to the Norwegian Association of Advertisers. An optional £35 keyboard was available from February 2000 - 2 months later than planned - otherwise users must use (struggle with?) the remote control. |
Early adopters of Open include Woolworths, Manchester United,
Kitbag Sports, |
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In the run-up to Christmas 1999 Open reported that half its then 2m customers accessed Open at least once per week and purchased over £1m a week in sales. One retailer, GamePlay, said its sales via Open exceeded its Internet sales. Whereas Internet users are typically on-line for 6 months before making a purchase, Open's digital TV subscribers were typically buying within 2 months. Over 350,000 users had registered for the e-mail service and no doubt the availability of the keyboard will increase the take up even more. There is no charge for Open but telephone call charges are incurred at 1p per minute (min. 5p) while users are logged-on. Log-on time should be less than with a PC as the shopping and information content is sent via satellite and the orders stored in the set-top box. Once complete the boxes transmit the orders to Open's central system and from there they are relayed direct to the supplier's systems. Open is looking to upgrade the telephone links to high speed ADSL.
Telewest is planning to launch its interactive services in March 2000. It will be called Active Digital. As of January 200 it had signed up 29 partners. One service will allow customers to talk to agents in call centres using iSeeTV software from Media Logic.
ITV Digital has yet to launch its services but in February 2000 made some announcements including ONmail, an email service access through the TV and ITV Digital's set-top box. And for the future, Steve Morrison, the CE of Granada, which is one of the 2 partners in ITV Digital, has expressed the possibility that commercial digital TV could be involved in delivering government services, education and community TV.
NTL has a service in Manchester which was created by Cable and Wireless that it recently acquired. NTL does provide software to rework Internet pages for digital TV. The C&W service offers e-mail and access to 33 different web sites that have been optimised for interactive television. Interactive games and quizes are planned based on popular TV programmes.
| Huge predictions are being made for the size of the UK e-commerce
marketplace. One report called Home Shopping in the UK predicts that
UK home shopping will rise by a quarter over the next 4 years, although it
thinks electronic shopping will be less than 1% of the total. Others
are more bullish, seeing digital TV opening up electronic shopping to the
masses as well as niche audiences. A survey early in 1998 under taken by
Pace Micro Technology, long before the mass advertising by SkyDigital, found
that 50% of women were keen to using their TV for home shopping with electrical
goods, books, music, video and clothes high on the list.
Many of the traditional agency based home shopping retailers are addressing niche up-market areas like sports wear, often using the internet as well as Sunday newspaper supplements. Currently the most popular items for home shopping via the internet are PC software, books, music, and travel. |
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SkyDigital is offering its own interactive services through the Open, the interactive television company it owns along with BT, Matsushita, and HSBC bank. Services will include an virtual shopping mall to provide home shopping, banking, and educational and informational services. SkyDigital has already an impressive list of retailers. They include Argos (now owned by GUS), Asda, Carphone Warehouse, Dixons, First Call, Ford, Going Places, Iceland, Next, WH Smith, Somerfield and Woolworths. Goods can be paid for by credit card or from a virtual bank account with HSBC.
Flextech Interactive will supply Open with its UKTV Shop, which sells BBC books and merchandise, and SceneOne, which sells CDs, books, videos, and concert and event tickets. Later Flextech will also make available to Open its Screenshop, selling domestic and household items, and TV Travel Shop, selling holiday packages.
Open aims to offer an easy to use, secure and friendly service. It has been developed to mostly use the remote control, rather than a keyboard, although a colourful keyboard can be purchased for £30 - practically essential for emails. All data transmissions are encrypted and sent over Open's own network to the participating companies.
SkyDigital already has a shopping channel called QVC. Viewers watch advertising programmes and then use their telephone to order. QVC is also available via the internet.
Flextech is also working with Microsoft and its WebTV trial. They have participation from Bass, Peugeot, Vauxhall, Honda and Tesco.
ASDA plans to launch it's own television channel at the end of 1998 to market non food lines. Simon Dunn, food retail analyst at Dresdner Kleinwort Benson said that digital technology will make home shopping services cheaper, simpler and more efficient, and will be a key driver of the market.
ITV Digital is taking to 30 content providers including the Sainsbury supermarket, HMV music publishers and retailer, Thomas Cook travel, Great Universal Stores (GUS), the mail order shopping company, and Dorling Kindersley, the educational publisher. With Sainsbury's there will be a link from Carltons digital Food Network to its Simply Food web site and Sainsbury's web site. Viewers will be able to follow recipes on the Food Network and then click to order the ingredients. Each company will spend £25m over 4 years on the development.
From May 2001 Tesco supermarket was also available on ITV Digital.
ITV Digital is also looking to Europe. It engineered a 250m Euro (£151m) investment alliance with Kirch Gruppe of Germany, France's TF1, Spain's Telecinco and Mediasat of Italy. Know as grand@lliance of Europe, each partner will invest 50m Euros to invest in internet and interactive projects. The aim is generate substantial ecommerce income.
Cable and Wireless has already signed up Argos, Littlewoods and British Airways. Discussions were also underway with QVC, What Car, ABC Connect (holiday information and reservation service) and First Call. C&W believes that consumers will have a much greater choice, and therefore keener prices, by being able to access all the millions of companies who will soon be doing business on the Internet.
Telewest has signed up Woolworths and WH Smith who will sell its full range of products including books and CDs as well as providing bespoke content for Telewest's Education Channel. Comos and First Choice will provide holidays. Telewest's interactive services are to be called Active Digital. With First Choice Holidays, customers will be able to talk to First Choice agents in call centres and the agents can then navigate internet web pages on the customers TV to show them details of the various holiday packages. This service will use iSeeTV software from Media Logic.
NTL is working with Tesco adapting its internet site for cable TV.
Microsoft's Web-TV is working with Carlton, M&S and Tesco.
Banking has now become a commodity market. Once the preserve of High Street banks with their thousands of branches, banking services are now being embraced by retailers (Tesco, Safeway with Abbey National) and insurance companies (Prudential with their egg service, Standard Life, Legal & General, Woolwich). Most of these services are telephone based with many now also offering internet services. Most services have been subsidised to gain market presence (e.g. Prudential is offering a savings rate of 8% but only a 6% mortgage).
The outcome is, that many people now have multiple banking, savings and credit card accounts, and have become adept at shuffling money around and placing amounts on various fixed term deposits. As people become more knowledgeable and experienced in financial matters, they will become more sophisticated and more demanding. At the same time, financial services suppliers will be under intense pressure to reduce costs. Reaching mass audiences electronically is the inevitable outcome with digital TV providing a means of reaching the mass audience that is not yet ready for PC banking.
Both HSBC and Abbey National have announced interactive banking for BSkyB customers. HSBC seems to be ahead by some months and is already using Open to sign up customers at the rate of 500 per day. The Woolwich recently announced it too would be using Open as part of its own Open Plan service which allows customers to manage their financial affairs at any time, from any place, by any means (e.g. mobile 'phone, TV, internet, telephone). The Woolwich was a participant in Managing Change's Strategic Interactive Marketing study which promoted this idea.
Barclays was working with C&W at the time of the NTL take-over.
Telewest has signed up Zurich Financial Services and Eagle Star.
AA Insurance, Orange, Barclaycard and Goldfish are participating in Flextech's / Microsoft's WebTV trial and and NatWest is working direct with Microsoft.
Insurance and Investments: After familiarisation with on-line banking, many consumers can be expected to progress to other financial services. Insurance, savings investments, pensions, shares, to name a few. Eagle Star is reporting great success with its internet site where customers can purchase home, motor and travel insurances. Many of the companies interviewed in Managing Change's Strategic Interactive Marketing study stated that they saw a mass market in TV banking before PC banking and before other financial services. In the Pace Micro Technology survey mentioned above, 25% said they would be willing to buy financial services through their TV.
The Money Channel was launch on SkyDigital on 7 February 2000. Founded by Adam Faith, the former pop star, who has an 8% stake, and Paul Killik. The Money Channel floated with an initial investment of £6.1m. Schroders, the investment bank, has a 20% stake. The Money Channel built a state-of-the-art TV studio in Wapping, east London, for as little as £1,500 per hour. It broadcasts 24 hours per day with live broadcasts while the Stock Exchange is open. The channel covers mortgages, savings, insurance, pensions, and credit. There is also an Internet web site. In November 99 it agreed an air-time sales sponsorship contract with Granada Mediasales. Later Telewest agreed to take the channel and it was also negotiating with NTL.
Unfortunately the company lost £4m in its first year on a turnover of £179k (only being live for the last 7 weeks of the year) and had to ask investors for another £10m. £8m is for ongoing development and £2m for developing the interactive services. Current viewing audience in June 2000 was reported at 908,000. Initially most revenue was to come from the television stations and broadcasters but after they decided to give away free set-top boxes there was little money left to subsidise content. The Money Channel then switched to advertising, commission from customers purchases via interactive TV, and pay-per-view. However some commentators remarked that telephone response adverts typically generate a 0.045% response compared to 2%-4% for direct mail. The Money Channel said that what was important was not response rates but conversion rates and viewer profiles. They said that these were higher with its viewers who tend to be ABC1 adults. Profitability is forecast for 2003.
On 1 May 2001 the Money Channel's shares were suspended with just a month's working capital left and no additional funds in sight. It had debts of £5m. It soon ceased broadcasting and went into administration under PriceWaterhouseCoopers. In August it was reported that 2 companies had offered cash for the assets, and one of these wanted to recommence broadcasting.
Interactive Services - Part
2:
[Entertainment] [News and Information]
[Sport]
[Education and Government Services]
[E-mail, Teletext & Internet Access]
[Other Interactive Services]
Examples of Interactive
Services
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This resource list covers parts 1 and 2 up until the end of July 2000.
[Digital TV Content]
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