Jill E. Posnick
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November 28, 2000
Interactive Digital TV Could Give Asia-Pacific a Lead in Next Wave of eCommerce

New Accenture Study Finds Asia Pacific has what it Takes to Bring Broadband to Consumers

HONG KONG and TOKYO, Nov. 28, 2000 – The Asia-Pacific region has the key elements in place to lead a second global wave of eCommerce, in which consumers will use their television sets to shop, bank and communicate electronically, according to an Asia-Pacific study on digital TV released today by Accenture.

Results of the study, which is titled "Riding the Next Wave: The Strategic Implications of Interactive TV and Broadband Services in Asia Pacific" found that digital TV represents an enormous and growing opportunity in the Asia-Pacific and could help put the region at the forefront of the development of this medium and its use for eCommerce. The study looks at 8 key countries within the region: China, Japan, Hong Kong, Taiwan, Australia, South Korea, Singapore and India.

A number of factors contribute to the area’s high potential, including higher rates of TV penetration than any other region in the world, and a substantial and growing broadband subscriber base already in place in some markets, according to the study.

"For the business world, digital TV marks the second wave of the eCommerce gold rush, and is likely to have even more profound and wide-sweeping implications for business-to-consumer commerce than the Internet," said Steve Snyder, Managing Partner for Accenture’s Asia Media and Entertainment Industry Group.

Asia-Pacific, which has lagged behind Europe and the US in business-to-business commerce over the Internet, has some key advantages in this new eCommerce wave, Snyder said. "With high television penetration rates, extensive cable TV networks, strong growth in broadband internet penetration, and a youthful population, the Asia Pacific region is well positioned to carve out a leading role in a medium that will ultimately reshape the way the world lives, works and plays," he said.

Governments across the region are actively encouraging the development of digital TV by deregulating broadcasting and telecommunications industries and opening markets to competition, the study says.

The infrastructure required for the most advanced form of digital cable TV is rapidly being built across major markets in the region. The 470 million households connected to the region’s existing cable and satellite TV networks are more extensive than those in either the US or Europe. For example in China’s major cities cable TV penetration is close to 100 percent. In addition, all major Asian countries have acquired domestic satellites to meet the rising demand for increased bandwidth for corporate data, and multimedia and Internet services. In the more affluent countries and cities, the telecom companies look to compete with cable via broadband entertainment offers as well.

The study describes Asia’s youthful population as willing to embrace new technologies and says businesses in the region, attracted by the high potential TV subscriber base, are ready to develop digital content and services.

"Consumers in the region are likely to adopt digital TV in whatever forms it is available to them," the study says. "In the near-to-medium term, satellite is likely to be the most popular due to the limited reach of cable and telecom infrastructure today, but this is very likely to change dramatically in the next 18 to 36 months."

The study points to several uncertainties surrounding digital TV, including the high initial cost of an integrated digital television set, consumer comfort level with buying goods and services via interactive TV, and the ability of broadcasters and content providers to create engaging and entertaining content.

"If these barriers can be overcome, however, digital TV will fundamentally redefine how companies and consumers interact and do business in the future," the study found. "Like the Internet revolution, the advent of digital TV will throw the market wide open in almost every service industry, creating opportunities for fast- moving, innovative firms to get way ahead of their competitors."

Digital TV Study – Asia Pacific Key Findings

  • A number of factors point to enormous growth opportunity for Digital TV in Asia Pacific:
  • Consumers in the region are likely to adopt digital TV in whatever forms it is available to them. In the near-to-medium term, satellite is likely to be the most popular due to the limited reach of cable infrastructure. But cable will also be a significant market.

  • There are still uncertainties surrounding digital TV, including:
  • Like the Internet revolution, the advent of digital TV will throw the market wide open in almost every service industry, creating opportunities for fast- moving, innovative firms to get ahead of their competitors. Broadcasters, cable and satellite operators, telecommunication companies and content providers alike will need to adjust and focus on the expanding needs of digital TV in order to gain customer mind-share.

  • To succeed in the digital world, Accenture believes that content providers have three options:
  • Companies who are the first to move in digital TV will achieve tremendous competitive advantages. These advantages include building a powerful brand franchise through customer mind-share, strong investor support, and positive responses from market analysts.

Country Highlights

  • In China’s major cities, there is nearly 100 percent cable penetration, and Singapore has already cabled 99 percent of all homes in the country, the study indicates.
  • In South Korea, cable operators are offering a range of advanced broadband services and enjoying greater up- take of services than their counterparts in many advanced economies.

Note: See report for further findings for individual countries.

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