Tuesday, August 30, 2005

iTV 35 years on

I just opened my mail this morning and my eye caught a small article by Paul Budde. He is one of the new media pioneers who started out in the Netherlands during videotext, but moved to Australia, where he became a telecom consultant. The article is on iTV and it is rather critical of all the forecast in that field. Just have a look.

iTV 35 years on
The concept of iTV dates back to the 1970s, when the first trials took place in Columbus, Ohio, followed by similar trials in Biarritz, Berlin and Nagasaki. After 35 years we still haven't seen any large-scale iTV roll-outs - the business models simply don't stack up.

I believe the problem with many of the ongoing iTV upbeat predictions is that two issues are getting confused. There certainly was, and still is, interest in personal services along the lines of iTV, but they are fulfilled by Internet-based services on PCs - eg home banking, bill payments, etc. The TV is not a personal device, so you would never see applications like these being used on TV sets.

Aside from the personal applications used on the PC, there is a limited set of applications that can be made commercially available via the TV. While many people will say that they want to use such services via the TV, few are prepared to pay money for them - television is seen as a free medium. So these applications need to either be advertisement-driven or made available at a small extra fee over cable TV networks. Free-to-air TV doesn't have such facilities available (TV stations don't have a relationship with their viewers) so the business models are very

Services like news, sport and video-on-demand are iTV applications that do work on TV, as they fit more with the general entertainment experience that viewers expect from television. For this, however, you do need digital TV. Also, the take-up is hampered by a lack of interest on the part of the consumers to pay the premium price charged for such TV sets. And, with inadequate penetration, advertisers are not all that keen to become involved.

The TV industry in the UK is certainly leading this market with the BBC arguable the best iTV broadcaster in the world. Once the TV industry finally has sorted out its digital TV strategies (they are more interested in defending their old analogue patch rather than embracing new digital TV opportunities) and are going to make such
services available they will now encounter stiff competition from broadband TV. This new medium offers unlimited access to video-based content - fully interactive and at affordable (Internet) prices. Content can be transferred via wireless devices from the PC to the TV, for entertainment use or family viewing.

For fear of competition, the free-to-air industry has actively (and successfully) been hampering such services on digital TV. By failing to move into this market the free-to-air broadcasters will now face an uphill battle to become successful players in the iTV market. The PC, not on the TV is now leading iTV. As for the broadcasters' dream of iTV it still is mostly a dream, even 35 years after its initial conception.

(With permission of Paul Budde)

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