Cable Subscribers Show Interest in iTV

Nearly 80 percent of digital cable TV and 55 percent of analog TV customers are receptive to interactive TV features, according to a study by the Cable & Telecommunications Association for Marketing (CTAM).

The study, “Interactive TV: Are Consumers Ready?”, which used video demonstrations of commercially available services rather than content descriptions, found that digital cable consumers who have experienced an interactive program guide crave additional interactive options. Analog cable consumers express greater interest in digital cable television when exposed to an interactive program guide.

Eight selected interactive TV services were demonstrated to 263 digital and 262 analog customers in six major markets across the US, where digital cable is widely available. Consumers were asked to evaluate the appeal of each feature and indicate their willingness to purchase. Video on demand (VOD) and Personal Video Recorders (PVRs) were the most appealing of the core interactive features. Customers were most willing to buy VOD services (71 percent digital and 67 percent analog).

The survey also examined the viewing and Internet behaviors of those receptive to interactivity and found that in the absence of true interactivity, they are simulating interactivity. Those receptive to interactivity reported watching TV with their families or in groups (78 percent digital cable, 69 percent analog), flipping or surfing through channels (69 percent digital and 60 percent analog), and watching two or more programs at the same time and switching between them (43 percent digital and 36 percent analog).

Consumers extend this interactivity trend to their PCs. In PC homes, 86 percent of very receptive digital consumers and 80 percent of analog customers co-locate the PC in the room with their TV and report simultaneous usage.

Data collection for the CTAM survey was done by Ipsos-Reid Corp. via online interviews conducted in mall locations in the Fall of 2000.

Interactive TV is one step in the direction of “t-commerce”, conducting transactions over the TV. A study by TechTrends, Inc., “TV-Based E-Commerce: An Investigation of Consumer Interest, Pricing and Payment Preferences“, found that nearly half of consumers consider security to be their primary concern when conducting a t-commerce transaction, while fewer regard the cost of a t-commerce service, convenience or ease of use as the most important issues.

TechTrends’ research has also identified several key relationships between the importance of security and certain consumer variables, such as gender and online shopping. For example, more women (50 percent) than men (42 percent) indicate that security is their most important concern. It is also the number one factor for more than half of non-online shoppers, compared to only 37 percent of the most active online shoppers.

Although only 31 percent of consumers consider cost of service to be the most important factor, its importance increases with the frequency of online shopping, while the importance of a transaction’s security declines. For instance, among consumers who shop online less than once per month, nearly twice as many people consider security to be the most important factor (55 percent) as those who specify cost of service (28 percent). But the most active online shoppers actually consider cost of service to be more important than security.

“We have also found that active online shoppers are less willing than non-online shoppers to pay for t-commerce services,” said Todd Wiener, TechTrends managing director. “Since frequent online shoppers have grown accustomed to PC-based shopping, they are less likely to adopt similar TV-based services unless the cost is lower than it would be on the PC. At the same time, these consumers’ familiarity with e-commerce transactions makes security less of a concern.”

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