Propelled by the introduction of broadcast digital television in the top U.S. markets last fall and the coming of digital cable systems, interactive TV is poised to move from regional experiments into living rooms across the nation this year.
Products and services that allow consumers to personalize their TV experience will provide much of the buzz at this week's Consumer Electronics Show in Las Vegas. CES will see a raft of announcements by software and hardware suppliers racing to form partnerships and release interactive-TV products.
Interactive-TV services allow viewers to use their remote controls or wireless keyboards to get more information during a broadcast or to treat their TVs somewhat like a substitute computer monitor to get e-mail and surf the Web. For example, a viewer might be able to get profiles of players while watching a soccer match by pressing a button on the remote.
Set to debut this year are TVs with software built in that allow viewers to interact with their TVs without needing a set-top box, and VCR-like boxes that record programs and save them to an internal hard disk, rather than tape, for later viewing. In some markets, consumers will be able to test-drive interactive TV by using digital set-top boxes from their cable company.
In addition, satellite TV providers are beefing up their digital offerings this year with advanced interactive services such as EchoStar Communications' recent partnership with OpenTV. EchoStar plans to use OpenTV's software this summer to provide specialized weather forecasts and other services such as home banking to its 1.6 million subscribers.
Analysts expect the number of subscribers to interactive-TV services to more than triple this year, from about 400,000 in 1998 to about 1.3 million. Digital cable services will hold about a third of this market, with analog cable hosting 200,000 subscribers and non-cable devices serving about 700,000.
This is still a tiny slice of the TV audience in the U.S. In the next few years, however, interactive TV will be introduced to more than half the 100 million TV homes across the nation as cable operators build out their digital networks.
"If it works the way we think it will, we'll see a substantial percentage of the U.S. population that will have access to digital interactive networks in 1999," said Steve Necessary, vice president of marketing for Atlanta-based Scientific Atlanta, a provider of communications networks and set-top boxes. "It will be toward the second half of the year when we'll see the second wave of services like video on demand or e-mail coming into the home on these platforms."
