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The message on interactive television that emerges from Accenture s consumer research is clear: I want what I want, when, where, and how I want it A three-way strategic debate is underway in the entertainment industry, a conversation involving consumers, content providers (entertainment companies), and the conduits (telecoms, cable, satellites) All share a strong belief that something big is about to occur in interactive television, yet no one is sure exactly how, or when, or even what will happen first Our consumer research provides an important clue: Whichever combination of device, service, and content gives the consumer control over the entertainment experience will win The research indicates that the consumer s needs determine adoption rates So whether a company is a content provider or a delivery channel, business strategies should be driven by a deep understanding of these needs
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In Accenture s research, consumer respondents were given a description of a future interactive television service with several innovative features: Internet access, the ability to view and record television, on-demand capability, interactive programs, interactive commercials, promotions and on-line buying, video games, and a robust program guide Asked to rate the relative importance of these features, they responded in a surprising way (see Figure 4-5) Our data reveals that consumers value on demand and viewing/recording/television features as essential or very important All features associated with control of the viewing experience rated highly: video on demand; watching programs at any time, including being able to watch a program from the beginning while the end of the program is still being recorded; watching past television programs at any time; and control over live television, including the ability to pause and replay There
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Essential Very Important
Relative importance of interactive television features (percentage)
was strong consensus around these features; two out of three consumers rate all of these features as essential or very important It is an interesting fact that while 68 percent of consumers rated Internet access as essential or very important, there was a discernible drop in the essential rating (only 24 percent) for interactive television appliances, as compared with other highly sought features This suggests that a significant portion of the consumer audience for interactive television already enjoys Internet access through another connection This is confirmed by other readings that indicate that 87 percent of those who already access the Internet at home would be inclined to purchase an interactive television service One conclusion to be drawn from this data is that Internet access may be a nice-tohave rather than a need-to-have feature in the earliest models of an interactive television service
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The good news from this research is that if you focus on the basics, there will be market uptake The bad news is that exotic features do not generate much interest, making it more difficult to see a workable business model that leverages media convergence Accenture forecasts that the DTV marketplace will generate $301 billion in revenue by the year 2005, with the largest sales flowing from premium channels ($147 billion), and a sizable portion ($32 billion) coming from video-on-demand (see Figure 4-6) Content companies have an opportunity to assume a powerful position in the emerging broadband environment Content could drive adoption of any given competing broadband technology over alternatives, because differentiated content has the potential to play a critical role in each step in the consumer s decision-making process Consumer choices will include basic, premium channels and video-on-demand, games, enhanced television, commerce, and advertising This content will be offered over DSL, cable, satellite, and terrestrial wireless by Internet Service Providers (ISPs), telcos, or third parties There will be room in the marketplace for hybrids such as smart Tivo-like boxes, which cache material for playback without going all the way to full video-on-demand Technological innovations such as MP4 will continue to change the marketplace In this environment, if you are a content company, the last thing in the world you want is to be beholden to a single channel