As everybody knows, 1998 will be the year of the digital
Couch potatoes of the world will unite and one-to-one interactive
communications will take over.
Actually, despite the fact that digital TV will launch on all platforms
this year, the truly interactive elements may not happen in earnest
until 1999. But for advertisers - especially retailers - adapting to
this brave new world is still a pressing concern.
It’s a confusing time for those in charge of new-media marketing, as
they wonder: which interactive TV company do I work with? Do I go with
cable or satellite? Do I talk to the owners of the digital licences or
the people making the content? Why get involved with interactive TV when
I can interact with my customers on the Internet?
When considering that first, all-encompassing question, there is one
candidate that stands out: British Interactive Broadcasting, the joint
venture between BSkyB, British Telecom, Matsushita Electric and Midland
Bank. About 140 companies have already discussed becoming a ’content
provider’ - having a shopping area on the service - with BIB.
Given the impressive line-up of partners in BIB - so impressive, in
fact, that it is currently under investigation by the European
Commission - and its natural affiliation with the 200-channel package
Sky is due to launch on digital satellite in June, advertisers could be
forgiven for thinking this was the only serious contender.
Certainly, BIB appears to think so. Its acting chief executive David
Hilton, says: ’It’s a no-brainer to say this will be the best product
Others maintain that BIB is nothing more than the favourite in a
three- or four-horse race. ’If I was a betting man, I’d put money on
BIB,’ says one industry insider. ’But in their haste to be first,
there’s a danger they might get it wrong.’
He continues: ’With e-commerce, the way you engage your clients is
critical. If you have a duff shopping system, no-one will be interested
and that could do untold damage to the market-place.’
Hilton is adamant that BIB’s service will be ’spot-on’ from day one.
And if that means certain services will have to be delayed beyond its
planned autumn launch, then so be it. The system is being constantly
updated as technology develops and will, he says, be TV-like rather than
What the four partners give BIB is a depth of resource unequalled by any
of its competitors - important when faced with the technological hurdles
that all players face in this virgin field. As Hilton says: ’This isn’t
rocket science; it’s more complicated than that.’
In its choice of technology, however, some believe BIB is at a
As long as it remains exclusively satellite-based, it must rely on
telephone lines for the ’return path’ from the viewer to the content
This not only requires an extra piece of kit - a set-top box - but is
potentially slower than cable.
Sky’s partners in BIB are, in effect, bankrolling the set-top boxes.
In this way, BIB is pivotal to Sky’s digital strategy, but it has yet to
announce its content providers, or even a brand name - although this is,
in part, due to the restrictions imposed by the EC investigation and,
insiders say, does not mean progress is not being made.
For its rivals in digital cable and terrestrial, interactive services
are not so crucial in the short term. BIB is talking both to cable
companies and to British Digital Broadcasting, which has half the
digital terrestrial capacity, about extending BIB’s services to these
platforms, and BDB is also in discussions with Microsoft about providing
viewers with access to the Internet. But Nigel Sheldon, a director of
the WPP new-media arm, MindShare Digital, says: ’The key subscriptions
driver will be movies and sport. Interactive areas will come in
This hasn’t stopped another big player, Flextech, from developing a
detailed strategy. Flextech, which will work as a content provider
across all platforms, has an interactive shopping channel, ScreenShop,
and is about to launch a second, TVTravelShop.
Some smaller operators are also vying for a slice of the market. Video
Networks has been testing its telephone line-based video-on-demand
services in Hull and is set to launch a London trial this summer. It
offers movies, music videos, cookery and keep-fit shows and educational
and transactional services. Those working with VideoNet include
Lloyds-TSB, Boots, Kingfisher and the Daily Mail. Its system will be
compatible with all set-top boxes.
Another triallist that has got in ahead of the crowd is Elmsdale Media,
owned by the cable company, NTL. It is testing similar services to
VideoNet in the Cardiff region. Elmsdale, which is cable-based and
funded by private investors, announced in September that participants
would include Thomas Cook, Littlewoods Home Shopping, Reuters and
Channel 4. However, it has been silent ever since.
As for the other cable operators, they are keeping quietest of all. The
word is that Cable & Wireless is working on a cable-specific electronic
programme guide and that it will begin to trial digital cable services
of some kind in the summer. Observers are waiting to see what C&W comes
up with - for, as Sheldon says: ’Whatever C&W does will set the standard
for the rest of the cable industry.’
C&W has plans for various interactive services, including so-called
enhanced TV, which allows viewers to play along with game shows and
choose camera angles during football coverage, but transactional
services seem less developed. As well as talking to BIB, C&W, together
with NTL and Telewest, is reportedly in talks with the US At Home
Network about a joint venture to provide high-speed cable Internet
But by relying on the Net for transactions, they risk cutting off a
lucrative revenue stream. As one senior cable manager admits: ’If you
give people free access to the Net, why should a commercial partner pay
you to come on board with transactional TV?’ Indeed, companies such as
Microsoft would have you believe that interactive TV is a red herring,
that the Net will be the key platform.
As most of those companies involved know only too well, the secret for
the moment is to hedge your bets. The only rule would seem to be: don’t
get into bed with anyone that isn’t preparing to work across all
Oh yes, and also avoid all bar those with the deepest of pockets.