Interactive TV: Been There, Done That - TV sales are still regarded as a rather radical concept, but Canal Plus in France and QVC in the UK can teach lessons for the interactive future. Hilary Curtis reports

Interactive television is still treated with a degree of suspicion by the television industry and consumers alike. Despite Open’s initial success, no-one feels it is ’quite there yet’, no-one appears to be making huge amounts of money out of it, and lack of consumer take-up is still cited as a major hindrance to its growth.

Interactive television is still treated with a degree of suspicion

by the television industry and consumers alike. Despite Open’s initial

success, no-one feels it is ’quite there yet’, no-one appears to be

making huge amounts of money out of it, and lack of consumer take-up is

still cited as a major hindrance to its growth.



But for television companies such as France’s Canal Plus, the ball is

well and truly rolling for interactive services, as Philippe Fau, head

of interactive television for Canal Plus, explains. ’We serve more than

three million digital subscribers and millions of viewers on cable and

satellite platforms in the ten countries in which we operate. We are

already offering interactive services across that market, and we are

aware that the potential across that market is huge.’



The services that Canal Plus provides include ForumBoutique, an

interactive application for advertising and e-commerce, and CanalClub, a

home shopping and direct response branch of Canal Plus with an annual

turnover of FF20 million.



CSAT is the promotional channel of Canal Plus’ digital platform in

France, Canal Satellite. CSAT features three presenters who provide

round-the-clock information on interactive services, as well as the

day’s and week’s programmes. Pressing the ’Progr’ button displays a menu

of all the interactive services available on the digital platform; from

programme information, pay per view, home shopping and games, to a list

of 70 radio and audio services.



Canal Plus’ long-term aim is to have an interactive application attached

to each of its services. Two recent innovations include providing

specific local forecasts and predictions on the weather channel and an

employment channel that offers a tailored job vacancy service.



Fau says that the size of the interactive business in terms of overall

revenue for Canal Plus is difficult to quantify. ’We expect all our TV

channels to develop interactive services in the future, but the main

money will be made through e-commerce and advertisers.’



He quotes recent Forrester research which predicts revenues of dollars

20 billion for the US interactive TV market by 2004. ’We expect to have

the same levels of revenue according to projections we have made this

year,’ Fau says. ’Around 90 per cent of it will come from e-commerce or

advertising.’



He describes the opportunity for advertisers as ’a new branding

experience’, and claims interactive advertising will open up a whole new

use of the television medium for advertisers; one that will ultimately

be more successful for them.



Fau also believes that direct response will be easier and more effective

with interactive television because viewers can just click on their

remote control and their name and address will already be logged in the

system.



’There are opportunities for greater contact with subscribers as well,’

he says. ’More importantly, it is a way for an advertiser to measure the

efficiency of its campaign.’



Fau says an agency can opt for many methods of advertising in

interactive TV, be that banner advertising or sponsoring entire

programmes. He says that when he deals with advertisers he has to

’remind them that it is television, so the concerns will be different

from those in any other medium’. He also advises them to assess how they

can get the best return on their money. ’I would encourage them to look

at sponsoring an entire show because of the exposure their brand is

likely to get,’ Fau says.



’If you take a game show as an example,’ he adds, ’a brand can be

present throughout a 45-minute show, which is fantastic news for

advertisers.’





QVC THE SHOPPING CHANNEL



The dulcet tones of the QVC presenters are enough to lull many cable

channel surfers to sleep. But the steady growth of the home shopping

channel since its launch in the UK in 1993 has silenced many of its

critics. Now it is launching its own interactive, advertising-free TV

shopping service on Sky Digital called QVC directory.



It launched an interactive service on the web last year, but that still

only accounts for less than 2 per cent of its overall business. So the

company is understandably cautious about the possibilities of

interactive selling.



’The website is catching on fast, but it still only accounts for a

minute percentage of the channel’s sales,’ says Richard Burrell,

director of digital media for QVC UK. This 2 per cent figure, Burrell

says, is roughly equivalent to the level of sales achieved through

Teletext.



But the transactional website has recently been given a face-lift which,

Burrell says, ’reduces the worldwide wait’. He explains that the idea

behind expanding into interactive selling online is to begin building on

the number of routes into the home.



’Our policy is to choose as many ways to sell as possible,’ Burrell

says.



’You build your business by exceeding the expectations of your customer,

not by providing lots of whizz-bang graphics and glitter on the

website.’ QVC has always traded on the fact that it is a shop, not a TV

channel, and what you see in the shop window is what you get - however

you decide to buy your goods. So far, consumer electronics and health

and beauty products have proved the biggest attraction for online

buyers.



When QVC UK launched in October 1993 it went to analogue cable and

satellite customers on the Sky platform. It was a sister service to its

already well-established US counterpart, QVC Inc, which owns 80 per cent

of the UK outfit, leaving Sky the remaining 20 per cent. The channel has

a market penetration of 25 per cent and Burrell quotes record increases:

from pounds 62.9 million in 1996 to pounds 146.2 million net sales in

1998. This year, QVC moved into profit for the first time since its

launch in 1993. It announced a pounds 12.5 million profit for last year

against a pounds 228,000 loss the previous year.



In the US, QVC reaches 70 million homes, because of its predominantly

cable distribution, and has launched a successful web TV service. So QVC

Directory, which is choosing to remain separate from Open (not wanting

to send customers off to competing retailers), will be one to watch.



Although QVC does not have an exact television channel competitor, it is

battling with the Granada/Littlewoods joint online venture. Not to

mention facing the might of Open, Sky Digital’s new interactive channel,

which has retailers such as Argos, Next and Woolworths.



’Any retailer is a competitor for us,’ Burrell says. ’Anyone that

competes for people’s disposable incomes, regardless of whether they are

selling online or through a TV channel, is taken very seriously indeed.’



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