Network Insight Institute

Clive Morton

Clive Morton, ntl

Business realignment features prominently in the current UK digital TV environment. Whilst the UK is the world's first and arguably the most developed digital television market, it is still in the process of settling out. That is, it is highly probable that considerable further rationalisation will occur. OpenTV was not the success first envisaged, and has now been subsumed into Sky. ONdigital has been rebranded as ITV Digital, using the ITV brand name, from the third TV network in the UK. Additional ITV marketing is struggling to reach success. Terrestrial digital has passed one million subscribers but is still struggling financially, despite its relaunch as ITV Digital. There is now discussion occurring as to whether the UK regulator, the Independent Television Commission (ITC) should allow a merger between ITV Digital and Sky. The ITC's Director General has recently commented that the focus of regulation should not be around the creation of competing platforms, but rather on whether there is open and fair access by programmers to these platforms.

ntl and Telewest, the two major cable operators in the UK, are cooperating closely on marketing digital cable to the point where they share a single sales agency for advertising on cable TV and cable Internet platforms. This is to reduce costs. I should also comment that within the UK, within each geographic area, the cable operator has a cable monopoly. This is unlike the competition between Telstra and Optus here in Australia.

In terms of growing uptake, although it is still early days, there is nevertheless an increasing awareness of digital television within the general public. The statistics on the slide here show this, particularly in terms of cable interest and take-up, and in terms of interactivity. More recently, with the Wimbledon and British Open golf events on Sky Digital, each has seen 0.9 million and 0.5 million interactive viewer accesses per day. So, there has been tremendous involvement in those two sporting events.

At this stage interactive shopping in the UK has not been a roaring success. However despite its early lack of performance, the ntl shopping service is now starting to grow in popularity. In the UK there are now eight million digital subscribers, or approximately 35 per cent of homes, broken down into roughly 70 per cent satellite, 20 per cent cable and just over 10 per cent terrestrial. According to a recent survey, over half of all digital subscribers say that since acquiring a digital TV facility they now watch or use more television.

In terms of the interactive advertising, you would certainly know from ntl's business that the demand for interactive advertising is certainly present. We also understand that Sky has more demand for interactive advertising than it can currently deliver. But currently there is no industry-wide standard for publishing interactive TV commercials, and the production costs for true enhanced television advertisements are still high. That itself is at least in part due to the proprietary delivery systems and authoring tools in use. ntl is presently offering advertising on its interactive pages, not as enhanced TV but via an inexpensive html-based solution.

What we are also seeing in the UK is that the line between advertising and content is blurring, and will continue to blur as technology promotes purchase opportunities at every moment on a television programme. This is something the ITC are wrestling with at the moment. For example, in Friends there is a prompt that enables you to buy the clothes that one of the actors or actresses is wearing, when they are on the screen.

Some of the toughest challenges faced by ntl and the other digital operators, are in managing the operation of a broadcast network. Certainly, in an interactive environment, this also includes managing the one-to-one relationship with the end user. And this is new territory for every broadcast service provider.

Click here to view Clive Morton's powerpoint presentation.

«  Back

^  Top of page

Network Insight sponsors include: