BIB launches TV shopping

BRITISH Interactive Broadcasting is expected to announce on Tuesday that it will launch its television service at the start of next year and will be broadcasting home shopping channels sponsored by Great Universal Stores, a leading retailer, and Tesco, the nation's number one supermarket chain.

Coming on the heels of digital television launches by BSkyB last month and OnDigital on 15 November, the start-up will give viewers more new channels and the capacity to buy items ranging from washing machines to soap powder at the punch of a telly zapper.

British Interactive Broadcasting (BIB), which is jointly owned by BSkyB, BT, Midland Bank, and Matushita - the Japanese electronics giant - won official European Union approval on 22 October to go on air, after the European Commission took a close look at the market clout already enjoyed by BSkyB and BT. The Commission threatened in March to block the venture if BSkyB and BT abused their positions as the UK's dominant pay-TV provider and phone company.

BIB is set to offer home banking, games, and internet access as well as home shopping. There is speculation that Midland will sponsor the home banking channel.

The new broadcaster will face competition from cable companies, which are also planning to offer high-speed internet services through television.

"We shall be working to make the channels very attractive, very much television, not like computers," said John Swingewood, the BT director on BIB's main board.

Other retailers may soon join in. "We're talking to BIB," said John Clare, Dixons' group chief executive.

The effect of a heavily subsidised marketing campaign for interactive shopping is also likely to have unpredictable consequences on retailing patterns. Great Universal Stores (GUS), through its home shopping unit, is a natural user of BIB, because of the company's history as a mail-order retailer. BIB is also expected to boost sales for Argos, recently acquired by GUS.

The economics of interactive broadcasting remain unclear. Start-up investment has exceeded pounds 300m. BSkyB plans to subsidise the cost of the set-top receivers, halving the price to around pounds 200.