HSN launches interactive TV in the US: why the wait?

Saw today that the IAC/InterActive Corp.'s Home Shopping Network is launching a new interactive TV service in the US where viewers will be able to use their remote controls to buy goods being peddled on television. HSN is initially teaming up with satellite broadcaster EchoStar to offer the service, which means it will at first reach 12 million households.

I find it interesting that the US has taken so long to implment an interactive TV service. In other media, such as online, it has been a trail blazer. Just think of how almost all the innovations--and popular surge in usage--in 'Web 2.0' sites has come out of the US.

The UK, which has adopted a wait-and-see attitude regarding other new services such as online TV, has for once been a leader: the red button on a UK consumer's remote has become synonymous with interactive elements for a range of channels, from news and sport networks to home shopping programmes.

Yet maybe there has been some method to this US madness. The article notes that in trial markets interactive TV is accounting for 10% of all sales. I know that in the UK there have been lots of hiccups with very low usage for interactive TV services—despite their ubiquity.

The trend right now for broadcasters is to inject money into developing their online presence rather than expanding how to make their traditional TV services more dynamic. But I wouldn't be surprised if the rise of user-participation in online media has a knock-on effect in flagging interactive TV services. Perhaps being a late adopter in this case might not have been such a bad move after all?

Interactive TV: 1; Online TV: 0

Went to two conferences this week, FT Mobile Media and Online TV and Video, organised by Informa.

Ironically, one message that came out of the Online TV conference was that, in fact, computers and broadband still don't have a patch on traditional TVs when it comes to viewer numbers for video.

Channel 4, which launched its 4OD on-demand service at the end of 2006, has been running it simultaneously as a digital interactive service with pay-TV providers (Virgin Media, Homechoice and BT Vision), and as a PC-based service accessed via broadband. 4OD is a mixture of catch-up TV with a selection of archived programmes and films.

"4OD is overwhelmingly viewed more on TVs than it is on PCs," said Cosmo Lush, head of product development, told me. "I would say that pay-TV viewers outnumber PC viewers at a ratio of four to one."

He did point out that the PC user base has doubled since Channel 4 added extra free content earlier this year--but that potentially means that only one in eight people were using the PC service before.

One issue might be the hurdle of getting people to download a client onto their computers just to be able to use the service. (Another exec I met a few weeks ago from Channel 4 noted that while more men than women downloaded the client, women tended to use it more regularly-- meaning that among those that bother to download it, some never actually register and use it.)

But Lush at Channel 4 said the PC version of the service "will continue to evolve."

They have good reasons to keep pushing it, even if it's much less popular than the TV version. Since Channel 4 can offer the PC version direct to consumers without the need for partnerships with pay-TV providers, it gives them potentially a much better return on any revenues they make from it (from advertising or subs for premium content).

And it's of course so much easier to promote it and get people to click straight into the service direct from other places online. (Lush pointed out that search advertising, a la Google and Yahoo, has been an excellent investment for them so far.)

That's not to say that there's not room for developments of the TV version of 4OD. Channel 4 has yet to sign up the U.K. pay-TV market leader, BSkyB, to the service.