Interactive TV Shopping Revenues Will Account for Almost Half of All U.S. Television-Based Shopping, But Ad Dollars Won't be as Grand, Predicts Jupiter Media Metrix.
Cumulatively Shift from Phone to iTV Over the Next Five Years
Digital and Interactive Television Pre-Day to Kick-Off Jupiter's Online
Advertising Forum in New York August 7-9
NEW YORK, June 14 /PRNewswire/ --
Jupiter Media Metrix (Nasdaq: JMXI), the global leader in Internet and new technology analysis and measurement, today reports that while interactive television (iTV) shopping will account for 44 percent of total U.S. TV-based shopping by 2005, advertising on iTV will comprise only seven percent of U.S. TV advertising in the same year. According to a new digital television report to be discussed at Jupiter's Online Advertising Forum, August 7-9 in New York, revenues from iTV shopping will total 4.3 billion dollars by 2005, with the bulk of buying taking place on iTV shopping programs where viewers use a remote control instead of a phone to buy showcased items. While Jupiter analysts predict advertising on iTV to represent a 4.5 billion dollar business, it will be fragmented across networks, carriers and third-party response networks.
"Even though our research shows that there's money to be made in the iTV space, carriers, programmers, advertisers and merchants are struggling with models to justify iTV deployment," said David Card, Jupiter senior analyst. "Outside of video-on-demand, the new business that iTV brings will divide evenly between shopping and advertisements. However, advertising won't account for more revenues than shopping until 2005, due in part to current US economic conditions, Internet advertising's seeming ineffectiveness and the lack of a common national iTV technology platform."
Three Streams of iTV Shopping Revenue
Jupiter analysts have identified three forms of iTV shopping that together will yield 4.3 billion dollars in revenue:
* ITV Shopping Programs (3.4 billion dollars) - Viewers use a remote
control instead of a phone to buy items showcased on infomercials or
shopping channels such as QVC or USA Networks' Home Shopping Network.
* ITV Malls (0.7 billion dollars) - Viewers tune in to a Web-like catalog
or store that carriers and their merchant partners provide within their
* Integrated iTV Shopping (0.3 billion dollars) - Viewers interact with
offers embedded in commercials or programs, timed to take advantage of
Additional key findings and forward looking analysis from the latest Jupiter digital television research, titled "iTV Revenues: Positioning for Incremental and Diversified Revenue Streams," include:
* According to Jupiter analysts, channel shift will drive iTV shopping.
Over the next five years, Jupiter forecasts that 5.5 billion dollars in
revenues from shopping channels and infomercials will cumulatively shift
from the phone to iTV. Shopping via iTV will be considerably more
lucrative for the parent companies of major shopping channels (e.g. Home
Shopping Network, QVC and Value Vision) and will eventually provide cost
savings by replacing some call-center activity.
* ITV shopping faces the same barriers as Internet shopping, such as the
ability to touch a product, lack of instant gratification and additional
shipping costs. Although iTV shopping may exploit impulse buying
because of factors such as persistent connection and video
merchandising, Jupiter analysts forecast that iTV spending per household
will be significantly less than the amount that an average online
shopping household spends.
* Even though the near-term iTV ad revenue picture is cloudy -- with
Jupiter projecting interactive advertising to comprise less than
ten percent of US TV advertising -- programmers, advertisers and
agencies must experiment today because revenues will be bigger than both
iTV commerce and Internet advertising. In contrast to the Internet
(where there is a stable set of technologies and platforms), iTV will be
fragmented by geography and technology for the next 18 to 24 months.
Jupiter analysts, however, believe this fragmentation presents a unique
opportunity for third-party advertising networks because they will be
the only ones able to service national iTV campaigns.
Jupiter Online Advertising Forum
Now in its sixth year, the Jupiter Online Advertising Forum -- August 7-9 in New York City -- will examine the full spectrum of digital marketing, including: email marketing; cross-channel campaigns; rich media; branding; performance based marketing and more. The Jupiter Online Ad Forum is for marketers, strategic branders, advertisers, agencies and any organization faced with the challenge of branding digitally. The Forum will also include a pre-day (August 7) dedicated entirely to digital television -- the opportunities, the revenue sources, the future and the major players. For more information or to register for the Jupiter Online Advertising Forum, "What's Wrong With Online Advertising," visit http://www.jupiterevents.com. If you are a member of the news media and wish to attend, please send an email to firstname.lastname@example.org.
Jupiter iTV Revenues Report Methodology
Jupiter utilizes a wide set of data-gathering tools to conduct research, including systematic polling of leading industry executives, extensive consumer surveys, extensive executive surveys, Media Metrix audience measurement data, AdRelevance online advertising metrics and a rigorous approach to building market forecasting models. For a fuller explanation of the methodology, please visit http://www.jmm.com.
Jupiter iTV Shopping Forecast - In forecasting iTV shopping, Jupiter's key metrics were the portion of households that would purchase through their TV and how much they would spend. As a baseline for these metrics, the forecast used historical trends observed in Internet shopping, with adjustments for the differences between the media. The revenues depicted represent consumers' spending on iTV shopping, where a transaction is committed through an iTV system or as part of a cable bill.
Jupiter iTV Advertising Forecast - Jupiter's iTV advertising forecast uses conventional TV advertising as a comparison baseline for per-household spending. The forecast model's assumptions include the portion of advertising reaching iTV households that takes advantage of interactivity, and the premium for media spending that accounts for enhanced targeting, lead-generation fees, an upscale audience, and, eventually improved effectiveness.
About Jupiter Media Metrix
Jupiter Media Metrix, formed by the merger of Jupiter Communications and Media Metrix, is the global leader in Internet and new technology analysis and measurement. The Company delivers innovative and comprehensive Internet measurement, analysis, intelligence and events to provide businesses with unmatched global resources for understanding and profiting from the Internet. Jupiter Media Metrix brings together world-class, innovative and market-leading products, services, research methodologies and people. Jupiter Media Metrix brands include Media Metrix, AdRelevance, Jupiter Research and Jupiter Events. The Company is headquartered in New York City and operates worldwide, across the Americas, Asia Pacific, Europe (as Jupiter MMXI Europe), and the Middle East. Visit us at http://www.jmm.com for more information.
This press release contains statements of a forward-looking nature relating to future events or future financial results of Jupiter Media Metrix. Investors are cautioned that such statements are only predictions and that actual events or results may differ materially. In evaluating such statements, investors should specifically consider various factors, which could cause actual events or results to differ materially from those indicated from such forward-looking statements, including the matters set forth in Jupiter Media Metrix reports and documents filed from time to time with the Securities and Exchange Commission.
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