UK leads US in interactive TV acceptance

Some pioneers gain through initial advantage, others make the mistakes which enable those who follow to reap the benefit. Its not clear which category the UK falls into, but according to research conducted by Gallup for Pace Micro Technology, it is leading the US in acceptance of interactive services while maintaining a slim lead over the US in the overall take-up of digital TV.

In the UK, some 28 per cent of consumers now receive digital TV services compared with 24 per cent* in the USA. This suggests that the UK is less than six months ahead of the US in terms of market penetration. However, the establishment of interactive services, and the readiness of the British consumer to use them, suggest that in this area the UK continues to develop rapidly and may still lead the USA by one to two years.

The Pace research also reveals a number of striking similarities and differences between UK and US consumer attitudes to pay-per view and other television commerce services. Interest in pay-per-view services demonstrated the closest similarity in consumer opinions: in both countries, the most popular pay-per-view service is likely to be movies, selected by 75 per cent of US respondents and 71 per cent in the UK.

* - source - Pace Report 2001 and Strategy Analytics

The second most popular PPV service in the US is educational programming (56 per cent would use it) which is similarly popular in the UK (50 per cent would use it). Music and sporting events were also identified by approximately 50 per cent of respondents in both countries as pay-per-view services they were likely to use.

Andrew Wallace, marketing director for Pace said, "Various flavours of video-on-demand have been launched in the USA and the UK. Pace research shows that these have achieved strikingly similar acceptance and that in both countries there is wide potential to expand PPV in education, music, news and sports."

Television commerce (T-commerce) is also expected to become another important revenue stream for digital broadcasters. In the UK, consumer interest in T-commerce services has exploded since the first Pace Report was published in 1997. For example the 2001 survey shows that the most popular services are holidays and travel which 48 per cent of consumers would buy on TV. This dwarfs acceptance in the US where 15 per cent of US consumers expressed interest in this type of service. In the UK, some 45 per cent of respondents say they would be likely to use digital TV to purchase books, CDs, DVDs and videos and cinema, theatre and concert tickets, this compares to 19 per cent of US consumers.

Perhaps as a result of these differences, Pace found that 27 per cent of US consumers would prefer to shop at home on their TV rather than their PC. By comparison, in the Pace report 2000, Pace found that 42 per cent of UK consumers preferred to shop on their TV instead their PC, while only 26 per cent preferred to use their PC.

"The Pace research shows that T-commerce - buying anything from holidays to books and cinema tickets - is much more popular in the UK than it is in the USA. We believe this is partially due to a slower rollout of interactive TV services in the USA than in the UK. Despite higher PC penetration in the US, the ubiquity of TV indicates that the eventual penetration of T-commerce in the USA is likely to rise as fast as it has in the UK. The rate of development of UK T-commerce suggests that UK operators are also still experiencing rapid improvements in their market," said Wallace.

He continued, "The UK is currently leading the US in digital television penetration, but as the competition for customers hots up and interactive services take hold, broadcasters in both countries will increasingly use new digital technology - and new applications - to differentiate themselves more aggressively from the competition."

The Pace Report 2001 is published by Pace Micro Technology plc