Network: Electronic Commerce - Why the Web Isn't Delivering the Goods Europe's Biggest-Ever Experiment in Internet Shopping Floppeddisastrously, and the Television Companies Are Rubbing Their Hands. Mark Vernon Reports

Article excerpt

"The Internet will not be the mass retail channel that people have predicted it will be. It is really a test bed for interactive services, but mass consumer activity will be satisfied by consumer electronics, not PCs." Thus speaks John Moroney, principal consultant at Ovum and author of Digital Television: The Challenge for Broadcasting and Content.

His comments come at the same time as a report from management consultants KPMG, which analyses the dramatically poor results of the e-Christmas initiative, Europe's most prestigious Internet retail pilot to date. Although the site attracted over a quarter of a million visitors, only 225 individuals actually purchased goods, representing a minuscule one-tenth of 1 per cent of the site's users.

Moroney's argument is a perennial one, but it would seem no less powerful for that. "The Internet is driven from the technology perspective, not by broadcasting or retailing professionals. The Internet requires a hugely expensive terminal device, the PC. Broadcasters have a tool that has over 95 per cent penetration, is well accepted and easy to use." While the Internet might claim some part in building up the demand and expectation for interactive services, it will, quite literally, not deliver the goods, Moroney believes. That mass market prize will go to broadcasters, as distributors of online services to the customer. Apart from the economics, his conviction also rests on the vital issue of ease of use. Take, for example, a small but illuminating weather service delivered by TPS, the second largest digital satellite broadcaster in France. A variety of local weather reports are broadcast simultaneously over a fat data stream so that a subscriber can select the one appropriate to him or her and have it appear instantaneously on the TV screen, at the touch of a button that activates the set-top box. This mode of operation is highly convenient, not only for the end- user but also for the broadcaster and all the other parties in the chain. To drive his point home, Moroney argues that, even with a modem incorporated into the set-top box for use in service management and future developments, it would have little to do with the Internet, even in the minimalist sense of operating over TCP/IP networks. "This requires a complete change of the mind-set to a digital broadcast medium," he explains. For example, TPS is interested in services that would use the modem, such as pay-per-view movies. The modem could be used to charge up the credits on a smart card or even take orders by credit card online. But the product, the film, is delivered best by the broadcast medium. "The Internet does have some advantages for international communications and the random access of data," Moroney concedes, "but in the service environment it is the local or national context that matters, and these other media will immediately take the advantage. …