Economist on HK interactive TV: They have seen the future, and they aren't very interested

[James Love <love@cptech.org>]

Economist article on HK Interactive TV.   It would be interesting to
know a bit more about the architecture of the system, given US
disputes over opening ADSL and cable platform user interfaces,
and the general problems with closed ITV systems in the US.
   Jamie

http://www.economist.com/editorial/freeforall/13-3-99/wb9868.html



They have seen the future, and they aren't very interested

	CKY Hong Kong. Its citizens have access to the Internet "in a more
powerful form than 99% of users in the world", marvels Microsoft's Bill
Gates. Last year Hongkong Telecom launched the first commercial
interactive television (ITV) service in the world, offering video and
music on demand, along with high-speed Internet access, to 70% of the
city's homes. Mr Gates was impressed enough to fly in and announce on
March 9th that this network would become the chief testbed of
Microsoft's efforts to merge the television and the PC, allowing users
to gain access to broadcast-quality movies, PC games and pay-per-use
software from the network nearly as quickly as from their own hard
drives. 

	Mr Gates's presence threw Hong Kong into a technotizzy as the
government announced a lot of Singapore-rivalling projects, from a $1.6
billion "cyberport" to efforts to make Hong Kong the region's e-commerce
hub. But the city's planners do not seem to have noticed that the
Microsoft deal is better evidence of the service's problems than of its
potential. 

	Ever since ITV was first put together in the early 1990s, virtually
every trial has shown that viewers are not keen enough on
video-on-demand to pay the cost of receiving it. Hong Kong reckoned it
was different: its 6m relatively affluent and gadget-mad people are
packed tightly into easy-to-wire  apartment buildings, most within a few
miles of Hongkong Telecom's video servers. When the company launched the
service last March, it predicted that it would have 250,000 subscribers
by the end of March this year, paying an average of around $50 a month.
Instead, it has only 80,000 subscribers, paying an average of $35 each,
less than half of what it costs to provide the service. 

   [snip]

-- 
James Love, Director, Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
http://www.cptech.org    love@cptech.org
Voice 202.387.8030, Fax 202.234.5176