Feature

Will digital TV create an e-commerce boom?

As a platform for e-commerce, is digital TV something to switch on to? Alison Classe gets square-eyed assessing its future

The Government plans to end analogue television broadcasting some time between 2006 and 2010, depending on how soon the public is ready. "That means we're not that far off a situation where the audience for digital TV, and hence for e-commerce, is virtually the entire population," says Tony Meredith, leader of PA Consulting's broadcast special interest group.

Meredith has been involved with digital television (DTV) for three years, managing projects for the BBC and other clients. The demographics of the DTV audience will be quite different from those of today's Internet, he says. "With what is effectively a portal into people's living rooms, you'll be able to reach all sectors of the community."

Quantitatively, DTV offers a great audience for e-commerce, but how does it compare qualitatively? Despite rapid Internet take-up, some sections of the community remain chary of the Web, but almost everyone finds TV easy and enjoyable to use. If - and it is a big if - that ease of use can be conserved as interactive features are added, it will be a major plus-point for DTV.

Establishing links between e-retail propositions and television programmes is another possibility that might give DTV the edge. Bob Wild, head of e-business at Compass, illustrates the sort of near-instant gratification that might become possible for both consumer and retailer. "When your favourite soap character comes on wearing an outfit you like, a window will pop up and you can order that outfit. Next morning, you'll be wearing what you saw," he says.

Rather than competing head-on with the Web, DTV can be seen as an alternative to other forms of TV promotion. The UK's first interactive television commercial recently appeared on Open. This commercial - Stir It Up from Chicken Tonight - produced by Unilever, invited viewers to proceed straight from the advert to an area where they could order a money-off coupon and recipe book or view recipes on-screen. This might sound like a small step for humankind, but Ian Howlett, director of new media agency Interesource, says, "For advertisers, digital TV represents some completely new opportunities. They'll be able to receive real data about individual households that have requested further information on a product, or bought directly as a result of the interactive advertisement."

One of the drawbacks of DTV compared with the Internet is the multiplicity of architectures, which currently fragments the audience. Cable, terrestrial and satellite DTV all work differently from the point of view of the developer, and even the cable players don't necessarily see eye-to-eye regarding architectural details. So, at the moment, it can be a major operation to replicate a DTV capability developed for one platform on to another.

The Digital Video Broadcasting Group is trying to improve matters here, but in the meantime some businesses are opting for a single platform, which means they will not be reaching such a wide audience. And if they choose Open, the player with the largest penetration, cable fans say they will be sacrificing performance and functionality.

DTV also lacks some of the technical capabilities of the Web. The resolution for displaying text is not as good as on a computer screen, and interactivity is limited at present. Meredith points out that one of the capabilities of DTV that is most attractive to retailers - the potential to link television programmes with interactive content - is currently especially challenging. "Ideally, someone who is watching a travel programme would be invited to 'click now to book this holiday', but at this stage it's not easy to achieve," he warns. It is not just that technical difficulties have to be overcome, close co-ordination is needed between the programme makers and the broadcasting companies, he explains.

There are also limits, both technical and commercial, on the ability to link DTVe-commerceareas together so that the user can "surf", although again that may change in future.

Given the difficulties and costs of implementing DTV, it is not something to rush into. Some organisations, though, will feel that they have no option.

Businesses that want to sell consumer products to those less likely to have regular Internet access will be the first to jump in. Hence, the DTV activities of players such as Asda, which could use DTV to target housewives.

There are also products and services particularly likely to be bought by "couch-potatoes". Orbis is helping gaming organisations including Blusquare and Ladbrokes to create sports betting sites, both on the Internet and on DTV. Charles Malir, Orbis' marketing director, says that DTV will bring some unique opportunities, "ifthere'sa penaltyina football match, you could give the viewer five seconds to bet - not something you could do on the high street".

However, Niels Bryan-Low, managing director of e-commerce consultancy Proteus, is sceptical that ordering pizzas via TV will catch on in a big way - although it is already a possibility courtesy of Sky and Domino's. "We encourage people to plan their e-commerce strategy by thinking about processes. And if you think about the processes a consumer goes through to order a pizza after four pints of lager, an ordinary telephone starts to look like a very useful device - I'm not so sure about DTV," he says.

Rather than just guessing, Wild says companies should go out and ask customers how they want to do business. "Use data mining to find out who your best customers are, then talk to them and find out what they really want. Not a focus group - that's just about what the company wants to offer."

For whatever reasons you have decided to get started in DTV - ask yourself, do you have the requisite skills on board? Developers say Web skills transfer well to the DTV world, especially in the case of cable implementations which are closer to Web architecture and protocols.

Specific experience in DTV is thin on the ground. End-user organisations may do best by hiring a consultancy or software house that has completed a project or two and can be induced to pass some of their skills on to their staff.

Putting together a DTV capability can be more labour-intensive than setting up a Web site. Just the same, fast results are possible as long as the project is divided into manageable chunks. David Da Silva, e-business practice manager with OS Integration, says that putting together both an initial DTV capability and a new Web site for Bristol & West (see panel) was achievable within the 90-day cycle laid down by OS Integration's project methodology. He recommends an incremental approach, "particularly as DTV technology is still emerging, it makes sense to build up your long-term strategy from short-term deliverables".

Getting a standard "engine" off the shelf is an obvious way to shorten lead times. Malir says Orbis will be able to implement a DTV betting capability in 10-12 weeks - it would take 8-10 weeks for a Web site.

As on the Web, choosing a standard product needn't undermine competitiveness. As Malir says, "You wouldn't not buy SAP just because the competition has it. It's the way you market your products, the partnerships you have and the prices you offer that will differentiate you." And buying a ready-made solution means you should be able to pass the problem of varying DTV standards to the supplier.

ERP providers also have some DTV trick suptheir sleeves.SAP recently helped Woolworths build a link between its R/3 system and Open. SAP UK's senior customer manager Christian Blumhoff says, "Woolworths knew all about the dangers of pricing errors creeping in if the online prices weren't linked to master files. By generating output for Open from SAP's product catalogue we were able to avoid that danger." The project, which took about 12 weeks, also allowed the DTV orders to be automatically fed into R/3 for processing. After that, it took just a few days more to put up a Web site based on the same data and processes, says Blumhoff.

Some companies see themselves treading a fine line between getting into DTV prematurely and missing the boat altogether. Portal thedeal.net sells mortgages and loans, but has gone to a lot of trouble to create an attractive "lifestyle portal" with magazine-style content and swish multimedia effects. Creative director Adam Black anticipates signing some kind of DTV deal in the next six months, but dismisses the current state of most DTV as "staid".

Black says, "Having built a brand, you don't want to shoot yourself in the foot by doing something that doesn't live up to it." However, he expects to see rapid technological progress in DTV, and says thedeal.net must move quickly when the time is right. "A service like AOL is as strong as it is because it got in early - much of its content isn't all that inspiring."

One way to hedge your bets is to manage e-commerce content independently of delivery method. Clive Keyte, director of interactive digital services with ICL, describes how the company put together a content management system for the BBC's commercial Web site beeb.com. Although the immediate objective was the Web site, it was clear that DTV delivery would also be needed, and now Wap has come along too.

Different media

The system was designed to cope with these different media. "For a news story, there might be a header, abstract, story and picture. The material is tagged to show which part is which, and templates dictate what parts are used for each medium. So for a PC the template would pull in the lot; for TV, the header, abstract, and story but no picture; for a mobile phone, just the header and abstract," Keyte says.

With this approach, the effort involved in adding a new delivery platform such as a new DTV implementation is minimised.

"Businesses shouldn't be betting on which model is going to win," says James Dobree, chief executive of Zygon, which offers a device-independent way of managing product-related content. "It's impossible to predict the way the market will turn out. It's not long since people were saying 'no-one will buy a car over the Internet'. The firms that win will be the ones with the flexibility to adjust to whatever their customers decide is the best model."

Wild also stresses the importance of flexibility at an organisational level. "With so much uncertainty you must be able to move fast. Put someone specifically in charge of e-commerce, and try to turn that part of your business into what I call a 'dotcorp' - a unit within a bricks-and-mortar business, but with the entrepreneurial spirit to move much faster than a conventional business."

Does DTV fit your e-commerce strategy?

Factors in favour

If the application...

  • Is business to consumer

  • Is one where seeing the product is important (eg catalogue shopping)

  • Entails only simple interactivity ("click to order")

  • Entails "family" purchases (because everyone in the room can see what you're doing)

  • Needs to reach people who don't have Internet access (eg government or public services)

    ...then DTV may be suitable

    Factors against

    If the application...

  • Is business to business

  • Deals with commodity items (you don't need to see it so ordering by phone works just as well)

  • Requires complex inputs (filling in a form on DTV is currently awkward)

  • Inputs confidential data (because everyone in the room can see what you're doing)

  • Is targeted at high-income groups already using the Web

    ...then DTV may be less feasible

    Case study: Bristol & West on TV

    There are quick ways to get started in DTV, as Bristol & West has found. It managed to put up not just a DTV service but also a new Web site, all in the first three months of this year. The work was done with e-business consultantcy OS Integration. The Web site and DTV service use the same underlying data sources, which, besides simplifying development, ensures that information about rates etc need only be maintained in one place.

    Martin Palmer, marketing director at Bristol & West, says, "For us, digital TV was an obvious route to a new segment of our customer base - a medium that the mass market consumer is already comfortable with."

    However, it was only when Telewest started offering DTV over cable that Bristol & West saw the project as viable. "We felt that, compared with satellite, cable offered greater potential to communicate information to our customers and greater potential for interaction - at lower cost." The areas of the country covered by Telewest's "footprint" also matched those where Bristol & West was, or wanted to be, active.

    Palmer explains that the initial version of the DTV offering has limited interactivity but can be enhanced later. Meanwhile, he thinks the project is worthwhile for its learning value alone. "The way Telewest structured the deal gives us good experience - affordably. There's only so much you want to spend in an area that may or may not materialise into a big opportunity."

    Can I help with that?


  • Email Alerts

    Register now to receive ComputerWeekly.com IT-related news, guides and more, delivered to your inbox.
    By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

    This was first published in May 2000

     

    COMMENTS powered by Disqus  //  Commenting policy