Electronic commerce: Digital television: will the consumer buy it?

A new survey holds bad news for broadcasters but good news for online retailers. Paul Gosling reports.

With just a few months to go before digital television is due to be launched in this country, two-thirds of the population still do not know what it is, according to a survey conducted by Pace Micro Technology. BSkyB is launching Britain's first digital satellite TV service in June, using set-top boxes manufactured by Pace, among others.

The boxes are decoders, converting the compressed digital signal into TV reception. They can translate signals from BSkyB's satellite service, from cable networks or, when they are launched, from digital terrestrial networks, but different boxes are needed for each transmission method. The satellite decoders are expected initially to retail at about pounds 200 each.

By compressing the signals, digital TV will offer much better visual and audio reception, particularly useful for wide-screen sets, and will also provide an interactive service, enabling viewers to request background information on a programme, and a choice of probably hundreds of channels as well as video on demand. It will also enable TV sets to be used for consumer services, such as home shopping and home banking, as well as giving access to the World Wide Web.

Pace's survey is one of the largest conducted into digital TV, with almost 1,200 people interviewed. But the results make uncomfortable reading for broadcasters, showing that they will encounter consumer resistance to paying for a wider range of TV programmes. Only 8 per cent of people said they would subscribe to digital TV to obtain pay-per-view programmes, while 65 per cent said that these services were of "no value" to them.

Those who have heard about digital TV are more likely to be men than women, and are younger and better paid than the average viewer. But existing cable and satellite customers are also aware of it, and are the most interested in obtaining the extra programme choice and higher quality reception that digital TV offers.

The survey shows, though, that people are interested in using digital TV for other services. More than 60 per cent of respondents wanted to use their TV for medical advice, and over half would like to use it to check travel arrangements and for education and training. There was also a strong interest in using it for voting in local elections.

These findings will be important to the Government, which this spring is publishing its Better Government White Paper, which will consider how public services can be improved through the use of interactive TV and home computers. But very few people want to use interactive TV to raise problems with their MPs.

Perhaps surprisingly, women are much keener than men to use interactive TV for home shopping. Half of those questioned were willing to buy travel services through the TV set, and there was also strong support for using it to purchase electrical goods, books, music, video and clothes. Almost a quarter of respondents were willing to buy financial services via TV. Younger shoppers were more willing to do home shopping than older people.

Recognising that controlling access to adult programmes and channels will be more of an issue with digital TV, the survey also asked parents what restrictions they would impose on their children's programme choice. Only one in three parents would stop a child under 10 from watching Natural Born Killers or Pulp Fiction, and many were happy to let under-fives watch them.

This was despite a quarter of parents noticing that their children behaved more anti-socially after watching violent programmes. Rather bizarrely, there was apparently more concern at the surfeit of American programmes compared with British ones than at the amount of violence on films that are likely to be accessed by children through digital TV.

"Our research has demonstrated that the public want digital television to deliver much more than just increased entertainment," said Malcolm Miller, chief executive of Pace. "We are encouraged by the statistics concerning intent to participate in electoral processes and excited by the prospect of running `virtual votes' on local issues using digital television facilities. We also believe that the interactive element of digital television will have a positive impact on society.

"The research supports our view that digital television will help to close the growing gap between information haves and information have-nots," Miller said. "The interactivity and Internet access afforded by digital television will mean that people don't have to be IT-literate to access information or products and services electronically."