Jupiter: I-TV's Time Is Now
Interactive television has been a buzzword since the 1990s. It has yet to live up to its potential, but is poised to earn its place among direct-sales media, said David Card, vice president and senior analyst at Jupiter.
"We believe this time it's really happening," Card said. "Some of the technology the cable companies and satellite companies are rolling out is taking hold."
Jupiter analyst Lydia Loizides projected that interactive television will penetrate 8 percent of U.S. households by year's end and reach 42 percent by 2005. That would be spectacular growth even by the standards of the Internet, which Jupiter estimates has a household penetration of 55 percent now and will reach 66 percent by 2005.
Interactive television will reach critical market penetration sometime during the next "couple of years," Card predicted. However, there likely will not be a standard platform for the medium, a factor that will complicate the market, he said.
Currently, television shopping represents only 10 percent of revenue generated by the television industry, while advertising makes up more than 50 percent, Card said. Jupiter is predicting a "sea change" over the next few years in which television direct sales will hold a 50-50 split with advertising on nonsubscription revenues.
Given the potential for growth in interactive television, marketers cannot afford to wait and see whether the predictions come true, Loizides said. Those who get in the game now will have the best shot at becoming leaders in the field.
"Start now, because others have," Loizides said.
The target market for interactive television will be the "twin screener" demographic, those who consume both television and Internet media, Loizides said. According to Jupiter's research, this demographic is mostly female, has an annual income of $35,000 to $75,000 and is mostly veteran Internet users.
This demographic tends to mix media consumption, such as looking online to research a movie or show before watching, and has a high degree of loyalty, Loizides said. Members of the demographic tend to be frustrated by the slowness of online video technology, though many do watch video material on the Internet.
The Jupiter Online Advertising Forum continues through Thursday.