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Will TVs Jumpstart UK E-Commerce?

By Chet Dembeck
Oct 14, 1999 12:00 AM PT

Earlier this week, an interactive TV service began offering its UK customers e-commerce services ranging from shopping to banking via their TVs.

Will TVs Jumpstart UK E-Commerce?

The service, which is known as Open, will instantly allow 1 million viewers to pay their bills, buy groceries or even order dinner by simply typing their orders on the portable keyboards hooked to their sets.

Some industry observers feel that the rollout of this service could be the easiest and quickest way for the UK to jumpstart its e-commerce -- which is lagging far behind both the U.S. and some of its European neighbors.

High Cost Connections Slows E-Commerce

Analysts contend that while most Britons would like to shop via the Internet with their PCs, the high cost of tolls is keeping them from doing so.

The fact of the matter is that a recent study done by independent researcher Jupiter Communications, Inc. found that one-third of UK homes are willing to pay for shopping, banking and other interactive service through their TVs.

Other Services Lining Up

Other services that will become available via Open, between now and Christmas, include travel packages and games such as Trivial Pursuit and Mastermind.

Even E*Trade UK, a joint venture between the number two online broker E*Trade Group and Electronic Share Information Ltd., is considering allowing stock trading through TV.

Retail Pacts Galore

Open also has cut deals with retail chain Woolworth's, mortgage lender Woolwich Plc and frozen food retailer Iceland Group Plc to offer product and services via TV.

The venture's other heavyweight backers, including HSBC Holdings Plc's Midland Bank and Matsushita Electrical Industrial company, are betting that they'll fire up the country's e-commerce by eventually reaching 97 percent of the households in the UK that have TVs.

Will It Work?

I find myself agreeing with industry experts who say that e-commerce won't move off of square one in Britain until telephone charges for using the Internet are drastically lowered -- or eliminated. So this sort of thing might be a good alternative until that time comes.

That's why I believe that Open and its backers' e-commerce gamble will pay off big. By using TV as the vehicle for online sales, Britain at least has a chance to play leapfrog in the emerging e-commerce arena.

Additionally, if Open is wildly successful, it would put tremendous pressure on the British Telecom industry to roll back its tolls -- killing two birds with one stone.

Italians Catching Up

The Italians have already shown that e-commerce can catch fire in a country with a dearth of personal PCs. A recent study done by Forrester Research showed that Italy's e-commerce marketplace is about to explode via wireless telephones.

Convergence Of Platforms In U.S.

In the U.S., the computer is currently the platform of choice for e-commerce, but that could very well change -- considering the millions being sunk into WebTV and networks for handheld wireless units.

Nonetheless, I think we'll see a convergence of platforms in the U.S. -- rather than the dominance of one. I predict that, within the next five years, e-commerce will no longer just be the realm of the educated and the elite. It will also be strongly embraced by the masses.

When that happens, we can finally begin writing the first chapter of the new economy.

What do you think? Let's talk about it.

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