Active Internet Users Ready for iTV Applications

Consumers who spend at least 30 hours per week online, and consumers who access the Internet on their PC while watching TV exhibit a greater interest in iTV applications than less active Internet users, according to a study by TechTrends, Inc..

The study “Opportunities in Interactive TV Applications and Services: An Analysis of Market Interest and Price Sensitivity,” found that more than 68 percent of active online users are interested in TV-based Internet services, compared to less than 56 percent of consumers who spend less than one hour per week online (including those without Internet access).

Furthermore, 46 percent of active online users are interested in creating personalized TV channels, compared to only 28 percent of the least active online users. Forty-nine percent more simultaneous users than nonsimultaneous users are interested in a personalized TV service. Time-shifting, as an application, appeals to 26 percent more simultaneous users than non-simultaneous users.

“Although our findings suggest that active online users and simultaneous TV/Internet users represent the groups of consumers that are most likely to subscribe to iTV services, the industry should not disregard the groups who express less interest in iTV,” said Todd Wiener, managing director of TechTrends. “For instance, although many consumers seldom access the Internet because they are unfamiliar or uncomfortable with PCs, they may find the Internet very appealing. Service providers are advised to emphasize to these consumers the benefits of interactive services, such as Web-browsing and email, through the TV set.”

According to a study by Boyd Consulting commissioned by iTV firms ACTV, Inc., Liberty Livewire Corp., Motorola, Inc., OpenTV and Universal Electronics Inc., the majority of consumers understand what interactive television is, they want it now and they are willing to upgrade from analog to digital cable, or switch between cable and satellite services, in order to get interactive content delivered to their homes.

“The study’s findings tell us that consumers are keenly interested in getting interactive TV services and that they like all the delivery options they were shown,” said David Beddow, CEO of Liberty Livewire. “Even with the nascent state of the technology and content, cable and satellite operators have a captivated, if not captive, audience eager to use interactive services now. Via digital set-top boxes that are being deployed today, we have the technology to deliver the interactive TV experience consumers want.”

Participants in the study were exposed to an interactive TV experience in three different ways: 1) a two-screen scenario in which synchronized Internet content for a TV program is delivered over a PC located in the same room as the TV; 2) a one-screen, or “on-screen,” scenario that drives interactive Internet content through a digital cable or satellite set-top box to the TV and is viewed as an overlay on part of the TV screen; and 3) an “on-screen” system enhanced by the ability to download the content to one or more handheld touch-screen devices that can personalize the interactive experience without disrupting TV viewing.

When asked how they would use interactive services delivered through any of the three options, consumers indicated a preference for instant access to information such as news, sports and weather (52 percent), followed by interactive TV guide (44 percent), behind-the-scenes information on TV programs (38 percent), email (37 percent), games or quizzes (32 percent), and other uses.

Among the findings of the Boyd survey:

  • The single-screen TV overlay format and the two-screen TV/PC solution were liked equally well by more than two-thirds of consumers participating in the study.
  • Personalizing interactive TV by using a handheld touch-screen device improved customer perceptions, with 76 percent liking the experience overall.
  • 64 percent of all digital cable customers and 57 percent of all satellite customers surveyed said that having the single-screen TV overlay format as an interactive solution would make them feel more satisfied with the service they currently have.

Boyd Consulting’s study is based on quantitative, one-on-one interviews with more than 500 head-of-household consumers across the United States in November and December 2000. An equal number of analog and digital cable or satellite customers were surveyed.

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