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DTV to win out over broadband Internet
Monday, June 11 2001
by Tony O'Brien


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walled gardens, for example BskyB's Open, being quickly superseded by services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.