T-commerce tunes in to a TV set near you

The most interaction South Africans usually have with their television sets is to hurl abuse and beer cans at them when the rugby is not going their way. However, the development of interactive TV is set to change this for good, and promises the advent of "t-commerce", or commerce via television.

[VIDEO]Interactive television, or iTV, has been launched in the US and Europe to an encouraging response. International viewers are turning towards their televisions as a means of communicating with one another in real-time.

Access is achieved by piping information to a set-top box in the viewer`s home, translated onto the television screen and, via a modem, viewers can make use of pointer remotes to access various options on the screen - much like users interact with a Web page.

The market for enhanced TV is potentially everyone who has a TV - which currently stands at 813 million households worldwide.

Cyril Belikoff, network solutions group manager, Microsoft SA

Microsoft SA`s network solutions group manager, Cyril Belikoff, describes interactive TV "as a platform to allow the viewer to actually get involved with what they are watching on TV rather than just `sitting back and watching` as currently happens with traditional TV".

"So, for example, the viewer can order something from an advert, rewind the live action on a sports programme or even just send an e-mail, instant message or surf the Internet from their sofa."

Possibly the most useful - and certainly the most marketable - function will be the remote access of e-mail, instant messaging and online chatting via the television.

[VIDEO]In a September 2000 report, Forrester Research predicted that so-called "t-mail" will make iTV the number one method of online access for present "offliners" in Europe.

"iDTV [interactive digital television] has the opportunity to become the major point of online access for the present offline population if iDTV companies adopt e-mail-friendly strategies. E-mail is the strongest driver for online access - cited by 66% of online PC users as the reason they go online from home. For many people, PCs are just an expensive e-mail machine," says Reineke Reitsma, Forrester analyst for Technographics Europe.

For many people, PCs are just an expensive e-mail machine.

Reineke Reitsma, analyst, Forrester Research

Researchers see t-commerce most used by "lazy interactors" - those people who want the facilities iTV offers without necessarily having access to home computers or computer skills.

The medium is suited to commerce and interactivity related to entertainment. In a Forrester study conducted late last year, the research group stated that although iTV will account for 16% of online retail by 2005, totalling 28 billion euros, "limited input, poor resolution and an entertainment bias led iDTV viewers toward `lazy interactivity`. As result, iDTV is better for purchases that are audiovisual, contextual and entertainment-related."

JSE-listed Multichoice is a major international player in the iTV market and plans to launch interactivity to local DStv subscribers by the middle of this year.

Chief technology officer for Multichoice, Ken Jarvis, says his company has invested over R30 million so far to bring the technology to the local market. This is set to drastically increase over the next 12 months as the multinational brings viewers more options.

The offerings on iTV will be basic. It will certainly not replace the PC.

Ken Jarvis, chief technology officer, Multichoice

South African viewers will be able to do basic banking transactions through Standard Bank via their television sets. Jarvis says other offerings will include basic retail offerings, and t-mail as well as interactive gaming.

"The t-mail offering will be basic to start off with: clients can send and receive mail via their televisions, but will not be able to send or receive attachments. We will supply a card facility, where people can send greeting cards to loved ones, but in the early phases t-mail will function as a messaging facility."

Jarvis says iTV will not replace the PC. Rather, it is there to complement it.

"The offerings on iTV will be basic. It will certainly not replace the PC. We aim to attract a more laid-back consumer who already spends a large amount of time in front of the television and will use the interactive offering as a complementary service, rather than spending hours surfing," he says.

Echoing this sentiment, Forrester`s Fall 2000 report finds that although PCs will remain in the spotlight, generating $246 billion in online sales in 2005, t-commerce will play a supporting role, with mobile devices making "rare cameo appearances".

[VIDEO]Although these non-PC devices will close only $23 billion in online sales in 2005, Forrester predicts they will influence a further $128 billion in offline sales.

Belikoff says Microsoft has also realised the potential of this platform: "The market for enhanced TV is potentially everyone who has a TV - which currently stands at 813 million households worldwide. As the cable and satellite infrastructure develops, many of these people will migrate from traditional TVs to enhanced TVs."

Merrill Lynch predicts the number of digital TV subscribers will grow from 34.5 million in 2000 to 220 million worldwide in 2005, according to an August 2000 document entitled "Global interactive TV infrastructure - technology meets mass market".

"Revenue from t-commerce is also predicted to be huge," notes Belikoff.

Alex Brown, a financial analyst at Deutsche Bank, forecasts that worldwide revenue from t-commerce will surpass revenue derived from e-commerce by 2004.

Electronic programme guides alone are set to reach 55 million homes and create $3.2 billion in advertising revenue over the next five years, as reported by Marialuisa Taddia of news site www.the451.com in October last year.

Multichoice`s Jarvis is confident that iTV will not detract from advertising revenue placed with Multichoice`s traditional digital TV offerings. He believes the additional commerce offerings will drive more revenue from advertisers.

Jarvis notes that most TV viewers are notorious for their short attention spans, and he says even if viewers switch from regular channels to view interactive offerings, they will ultimately switch back to the main DStv offerings.

Multichoice says the interactive service will be made available to almost all its 500 000 digital subscribers at a minimal cost. Consumers will, however, have to purchase modems, but Jarvis says the company has been investigating a subsidy structure that will keep costs down.

Additional costs will only be incurred for some services, such as advanced gaming and a minimal cost on t-mail, but the main services such as horoscopes, news and weather, as well as basic retail facilities, will remain built into the DStv subscriptions.

Multichoice will make use of Amsterdam-based and Nasdaq-listed sister company, OpenTV, for the software for its local offering.

Jarvis says OpenTV`s platform has been well received internationally and has already penetrated more than 11 million homes worldwide.

Forrester Research shows that pay TV will bring interactivity into 20 million European households this year, and by 2005, 50% of European households will have iTV.

All in all, there`s a bright future for couch potatoes all over the world.