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Digital TV (DTV) broadcasters are going to win out over broadband Internet providers as an entertainment source for new customers, it has been claimed.
A new study maintains that "the idea that broadband Internet will encroach upon the world of TV and become a major media delivery service is no longer sustainable."
Only in the area of pornography will the ISPs win out but this will present them with a moral dilemma.
Published by UK-based Analysys, advisors in telecoms and new media, "Interactive Consumer Broadband: Sex, Sport and Shopping?" suggests telecoms operators and ISPs will "delude themselves" if they cling to the hope that rich media entertainment will deliver substantial revenues.
In the battle for customer ownership and spend in the converging telecoms/broadcast arena, broadcasters will have the upper hand, it declares. The report says their cheaper, higher-quality multi-channel digital TV will be more attractive to consumers than the more interactive services that Internet players can offer.
For home entertainment, content will be key, and with most of it owned by the TV, film and media companies, wresting it away from these powerful players will be an insurmountable problem for all but the strongest telcos and ISPs.
The report says that Interactive TV is no longer taking its lead from the Internet and is developing service models better suited to its own technology and the context in which it is maturing.
"We can already see services such as Internet over TV and pseudo-Internet iTV walled gardens, for example BskyB's Open, being quickly superseded by services such as TV betting that draw directly upon the strength of the broadcast content," said report co-author, Robert Wood.
Pornography is one of the very few areas where broadband Web content will pay. For some adult content providers, such as Private Media, the promise of the Internet as an ideal delivery mechanism is already delivering margins higher than off-line alternatives.
However this success, says the report, presents service providers with a dilemma: they want the traffic and revenues but not the negative associations with public perceptions of pornography.
However, it adds that all is not lost for the telecoms operators and the ISPs and broadband Internet need not be banished to the bedroom.
Ultimately, the report states, the appeal of broadband Internet will have more to do with the dramatic improvement it makes to "narrowband content" such as shopping, news, infotainment and game-playing, than its ability to deliver video-based service.
The opportunity is there to begin to develop higher-quality, paid-for "narrowband" content and to charge for this by bundling access and exclusive content into monthly subscriptions.
According to the report, worldwide residential broadband Internet subscribers are set to increase from 6.2 million this year to 84 million in 2006. By steering a course between media (high bandwidth and low interactivity) and telecoms (low bandwidth and high interactivity), broadband ISPs can successfully exploit what the Internet as a medium does best, claims Analysys.
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