Media Analysis: Sky fuels rise of interactive TV

Sky is loath to reveal its plans for a credit card, doubtless saving its PR fire for its launch. A host of uses are being explored, although three - iTV ad response, home shopping and the topping up of SkyBet accounts - are believed to be the most likely.

The consensus among media agencies is that a Sky credit card will, at the very least, broaden uptake of iTV. Few advertisers use the medium, and those that do are mainly from the motor, financial services and travel sectors. Spend on iTV is estimated to be £5m, a fraction of the £3.4bn spent on TV in 2004.

The advent of the payment mechanism is predicted to raise iTV to a level where it can challenge the internet, by offering the opportunity to sell product directly off the screen. There may not be too many big brands rushing in to take advantage, but, for impulse-purchase advertisers, it would be foolish to pass up the opportunity.

Toby Hack, head of interactive at OMD UK, says the immediate boost will be felt by Sky Active and advertisers that use it, such as Domino's Pizza.

'It is an easier way to collect payment. Sky is a trusted brand with excellent customer service, so people will feel more comfortable paying for things through a credit card in their digital box than using other methods,' says Hack.

'The same applies to home shopping and the direct selling of CDs, DVDs and books. It will certainly bring in new brands to iTV.'

Simple sales

Beer brands are among those that would benefit from using iTV, according to Peter Edwards, managing director of Starcom Motive. He says the credit-card facility could also be a boon to companies such as Woolworths and WH Smith, which have been losing out to online retailers. 'Buying things with one touch of the remote control while watching TV is far more appealing than sitting at a computer and having to enter credit card and other personal details,' he says.

John Murray, joint managing director of PHDiq, whose clients include Sainsbury's, says supermarkets could also adopt the credit-card facility.

'They could put up a "recipe of the day" on Sky Active, and viewers could order the ingredients through the red button,' he suggests.

Last weekend the latest album from dance act the Chemical Brothers, Push the Button,was previewed on Sky Active in what is claimed to be a world first for iTV. Keith Rattray, head of digital at Carat, which created the promotion for EMI Records, rues the fact that Sky's credit card is not yet in operation. 'If you could sample the album, push a button (such as the album's title) and order it without moving off the sofa, it would complete the whole communication circle,' he says.

Before advertisers get carried away with the possibilities, Rattray adds that the onus is on Sky to fuel consumer uptake of the credit card. 'They will need to offer significant benefits such as zero interest or discounts on Sky services. Our research shows that Sky viewers are always looking for a reward to interact with ads and other services.'

Media buyers are more sceptical about the prospects for the other proposed application for the second card slot - broadcaster loyalty cards. The idea is that viewers will be offered a card for a TV channel that broadcasts on Sky, and rewarded with points for time spent viewing, to be redeemed for discounts on high-street goods.

Three broadcasters have signed up to a trial of the system. These are believed to be TCM, the Hallmark Channel and The Amp, and several CD and DVD retailers have been approached to provide the redemption offer.

HMV is not among those to have been approached, but its head of marketing and promotions Gideon Lask believes the system adds an exciting dimension to loyalty cards. 'We do not have a loyalty programme, but are always reviewing it, and if a broadcaster has the right brand fit for HMV, we would be more than willing to look at its scheme,' he says.

Loyalty difficulties

There are, however, concerns about the loyalty schemes' appeal to viewers.

For instance, they will have to insert separate cards in the slot for each broadcaster that operates a scheme and signal their viewing by responding to on-screen messages via the remote control every 15 minutes. They may also have to spend many hours viewing to earn enough points for a reward, likely to be £5 off a CD.

Starcom's Edwards points out that people watch TV for entertainment and are unlikely to relegate viewing choice and enjoyment in favour of earning points, unless they were going to watch the channel anyway. Ultimately, he says, the scheme's benefit to broadcasters may lie in getting people to watch the commercial breaks. 'Given all the channel-hopping during the breaks, together with the threat from PVRs, it could be a way of getting people to stay viewing during the ads.'