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NTL seeking ITV crown of England

Apr 9, 2001  •  Post A Comment

When one thinks of interactive television in the United Kingdom, the names British Sky Broadcasting, ONDigital and cable TV providers Telewest and NTL usually come up. But NTL’s communications director, Andy Crossley, doesn’t see the competition stacking up quite so neatly.
“We don’t directly compete,” Mr. Crossley said. “There [is] a whole set of reasons why we believe we have a product set that is dramatically superior.”
According to Mr. Crossley, this will become particularly apparent during the next 12 to 18 months, when NTL’s customers are able to take advantage of its “always on” broadband connection.
“Our research shows that customers are making more use of our interactive services than those with [BSkyB’s] Open,” he said. “And shortly we’ll introduce VOD .”
NTL is the United Kingdom’s leading cable TV, telephone and Internet company. It has more than 3 million cable and telephone subscribers in the United Kingdom and Ireland and about 1.4 million cable customers in Switzerland and France. By the end of last year, NTL had attracted 530,700 digital television customers; it predicts that by the end of this year it will have 1.2 million DTV viewers.
Broadband push
And NTL’s digital drive doesn’t stop with DTV. The company has spent $11 billion since 1993 to build a state-of-the-art broadband network infrastructure. And this February it launched a multimillion-dollar campaign to educate the general public about the benefits of tapping into the Internet with a broadband connection. The near-term goal is to get 100,000 U.K. broadband customers by year-end, compared with a total of 40,000-half in the United Kingdom-at the end of last year.
“In the Internet space, we are aggressively rolling out cable modems by the tens of thousands,” Mr. Crossley said. “We have made a significant head start on BT [British Telecommunications], who, as everyone is aware, is struggling to roll out DSL [digital subscriber line services].”
No comment was made regarding reports that the company held exploratory talks with Liberty Media Group last month regarding a joint rollout of high-speed Internet services in Europe.
“We are finding that traffic to our interactive services goes up by a factor of three or four-creating huge spikes-during conventional TV commercial breaks, particularly in prime time,” Mr. Crossley said. “Customers browse around during breaks, yet maintain the TV audio and program screen reduced in a corner.”
But interactivity does not necessarily doom all ads.
“The NTL EPG [electronic program guide] shows small video clips of third-party ads and is used by 70 percent of customers every day,” Mr. Crossley said. “Viewers show a preference for these over the TV commercials. Interactive TV is the optimum marketing solution-we can drive extra revenues on the back of superior services.”
Enticing users
One way NTL attempts to do this is to provide its digital TV customers with a free walled garden, which includes e-mail, games, information and repurposed Web sites. NTL has more than 120 interactive content sites signed up, including retail, betting and banking partners.
Despite this, Mr. Crossley conceded, the most widely used services are e-mail and games.
Two-Way TV, 48-percent-owned by NTL (the largest shareholder), launched a games channel on NTL a year ago. Its offerings can be found in the walled garden or picked up on TV channels that have gone interactive. Two-Way’s latest coup was a February deal with MTV that paves the way for a whole range of interactive quizzes and video-based programs.
NTL’s digital offerings run on Liberate software from an HTML or JavaScript engine. Scientific-Atlanta and Pace make the set-top boxes that are deployed to its subscribers. This year NTL will download software directly into the set-top boxes to enable customers to plug their PCs into the back of the set-top box and use the cable modem for Internet access.
“You only need one point of entry for the cable modem device and then, if needed, a second cable can be run to the loft,” Mr. Crossley noted.