Study: Interactive revolution will be televised

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by Terho Uimonen

(IDG) -- Infrastructure advances, coupled with growing consumer demand, are fostering a revolution in the emerging interactive television market, with more than 81 million Internet-capable TVs expected to be installed worldwide by 2004, according to a new report from market researcher International Data Corp. (IDC).

In the U.S., which is expected to make up more than half of the worldwide market for interactive TVs, or NetTVs, as IDC has dubbed them, the unit deployment rate is expected to increase tenfold, from 1 million in 1999 to more than 10 million by 2004, IDC said in a statement summarizing the report, titled "NetTV Market Forecast and Analysis, 1999-2004." IDC is owned by International Data Group, the parent company of IDG News Service.

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Worldwide activations of NetTVs are expected to increase from 6.1 million units in 1999 to 19.5 million in 2004, according to IDC's predictions.

The NetTV revolution is fueled by what IDC said are "massive improvements" to the infrastructure, as well as lower costs for deploying TV-centric information appliances. Other factors driving the market include consumer demand for shared "new media" entertainment and information services, as well as the popularity of TV, IDC said.

With bandwidth, content, price points and system capabilities in place, the opportunity for a new type of device providing consumers with interactive features is here now, Mary Joy Scafidi, senior research analyst for IDC's Consumer Devices program, said in the statement. The devices will supplement and may even replace PCs, she added.

The long-awaited arrival of a mass market for interactive TV services has led to a recent flurry of announcements and deals between content, device and network providers.

In Asia alone, several interactive TV-centric deals were announced this week.

On Wednesday, Hong Kong-based Satellite Television Asian Region (STAR), a wholly owned subsidiary of Rupert Murdoch's News, teamed with Taiwanese broadband Internet service provider GigaMedia to form a joint venture that will focus on developing interactive TV services in Taiwan.

Nokia, meanwhile, announced on Monday that it has reached an agreement with Fujian Radio and Film Information Network Center to participate in the rollout of interactive cable TV services in China's Fujian province.

Under the terms of the agreement, Nokia will supply its digital multimedia terminals that enable value-added interactive services, including electronic newspapers, stock market information, remote education and home banking, the Espoo, Finland-based company said in a statement.

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International Data Corp.

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