Audio Video News

Interactive TV (iTV) is about to become a reality, according to a new study released by The Strategis Group. The study, "Interactive TV: Platforms, Content, and Services," projects that, by 2005, the majority of US households will be iTV-capable, and that active usage will reach over 41 million—a dramatic rise from the 1 million households using the service this year.

Strategis analyst Keith Kennebeck says that "as operators continue to upgrade their networks to digital and interactive capability, and content providers prepare for widespread deployment of interactive products and services, the pieces are being put in place to take iTV mainstream in the coming years. iTV has the potential to revolutionize the way we use our televisions—we'll be able to order products, access information, get movies, and chat with friends with the click of a remote.''

According to the findings, iTV growth is expected to be fueled by consumer demand for interactive services such as Video on Demand (VoD) and television-based commerce (T-commerce), and by cable, digital broadcast satellite (DBS), and digital broadcast operators' desire to tap new revenue sources. According to a recent Strategis Group survey, 24% of consumers are very or extremely interested in VoD, while 12% are very or extremely interested in T-commerce.

Strategis' Ty Cottrill explains that "this survey data reveals that not all consumers are currently ready to embrace interactive services because iTV has not yet demonstrated its value. This will change quickly if consumer experience shows interactive television to be an entertaining and useful service."

According to the Strategis findings, all of the major cable multiple-system and DBS operators have demonstrated their interest in providing interactive services over broadband networks and digital set-top boxes. Terrestrial broadcasters are also expected to enter the iTV fray as digital broadcasting proliferates in the coming years. Strategis says that cable and DBS operators are counting on revenues from interactive services to augment their traditional video service revenues, and that VoD alone is expected to generate $2.6 billion in incremental revenue for cable operators by 2005.