With interest growing in a 500-channel future, several panelists at Wednesday’s “Interactive Television Today” confab at InterTainment ’93 questioned just how much coin consumers will shell out for interactive services.
“We haven’t proven that the consumer is willing to pay the price for interactive services and entertainment,” said Dan Downs, executive VP of NTN Communications and one of five interactive TV executives on the panel. “The key issue is pricing, and it’s an issue that we must continually address.”
Contending that the pricing issue is “being swept under the rug,” Downs said most in the industry assume the technology’s cost will continue to come down but that the assumption has not been proven.
“There are two areas of price consideration,” Downs said. “The price of the box a consumer will need for the services and the cost of getting the services into homes.”
Another panelist, Videoway’s Sylvie Lalande, claimed that consumers will be willing to pay extra for the convenience of such services as banking and choosing programming.
However, Downs said, “There is a convenience factor, but when the bill arrives for all these services, are the consumers going to remember the convenience?”
Downs, who said volume discounts may be the way to attract customers, cited the Genie on-line computer service, which was originally billed at $ 6 an hour but gained customers when service costs were cut by almost half. “Volume discounts are going to be very important in all of this,” he said.
Asked about consumer willingness to spend on the new services, Paul McKellips , Interactive Systems director of corporate communications, said: “It’s been over-hyped and over-evaluated at what the market will spend. There will have to be a pricing point that will work.”
On the subject of who has benefited financially from interactive technology so far, McKellips got laughs when he told the audience, “So far, the only people making money are the ones putting on these conferences and the lawyers suing everybody over interactive contracts.”
As for Hollywood’s involvement in the new technology, McKellips said: “The reason Hollywood hasn’t gotten more involved is because the interactive industry is technology-driven and Hollywood is customer-driven. That’s going to have to change.”