According to a newly released study of the interactive television market from Forrester Research, mass-market acceptance of electronic program guides (EPGs), enhanced TV broadcasts, and TV-based web browsing is less than five years away.
Although interactive platforms have been slow to penetrate the market, the research firm said awareness levels are growing for interactive TV (ITV) viewing -- which Forrester defines as "any activity in which viewers use a remote to interact with information displayed on a TV screen."
To date, Microsoft's WebTV, Wink's enhanced television services, and Gemstar's GuidePlus system stand as the most successful platforms, and they will get stronger.
By 2004, EPGs such as GuidePlus will reach 55 million households, enhanced broadcasts will be viewable in 24 million households, and TV-based Web browsers such as WebTV will penetrate 13 million households. This will mean a major new revenue source for interactive programming, advertising and ITV-enabled impulse purchases.
A new addition to the mix comes from hard-disk-based video recorders such as TiVo and Replay. Of the two, Forrester selects TiVo for market dominance.
"We think TiVo has an edge," the report stated. "It's not just TiVo's impressive list of investors, which now includes networks NBC, Disney and CBS, cable and satellite operators Comcast, Cox and DirecTv, and TV Guide. It's the interface."
Forrester also believes new cash will flow into cable and satellite operators from ITV services, and cable and satellite operators will win the lion's share of profits from these services, leaving broadcast networks fighting for the rest.
Meanwhile, little of this revenue will be incremental business, the Forrester study said. Much of the revenue for ITV will come from current ad spending for television, the web and direct marketing. -- Greg Tarr