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Commentary: What can ITV give back?

The Microsoft ITV/Predictive Networks partnership presents an enormous market opportunity--but only if ITV's subscribers see a reason to accept profiling.

By Adam Sarner, Gartner Analyst

The Microsoft ITV/Predictive Networks partnership presents an enormous market opportunity for programming providers, cable operators and advertisers--but only if ITV's subscribers see a reason to accept profiling. So far, no one has told them why they should.

Predictive viewer profiling holds obvious appeal for advertisers and the networks and cable operators that compete intensely for their dollars. More precise targeting of viewers makes advertising more effective and ad prices inevitably go higher. But none of that will happen unless subscribers accept it and, even more importantly, the perceived loss of privacy that goes along with it.

Consumers of all kinds are extremely wary of giving up their privacy rights, even if they're assured that any information about them will be anonymous--as is the case with ITV. The perception of an invasion of their privacy will always outweigh the reality as companies like TiVo, DoubleClick and Microsoft itself have all learned the hard way. Microsoft remains vulnerable to privacy concerns, having faced a series of high-profile privacy problems in recent years. ITV will have to communicate its privacy policies very carefully and very effectively to avoid further difficulties.

Despite consumers' intense wariness about giving up their private information, they will do so if they're offered a compelling value proposition. The ITV/Predictive announcement is vague about what's in it for the audience; it talks mostly about tailoring advertising to the viewer. The ability to avoid commercials that don't interest them may mildly appeal to some viewers, but it likely won't enable ITV to reach critical mass.

See news story:
Microsoft interactive TV to track viewers
ITV has to find ways to make its profiling technology benefit the ITV subscriber. Targeted advertising won't do it, but targeted viewing might. For example, if ITV could tell dedicated watchers of "Buffy the Vampire Slayer" when their favorite episode will be on next, they will likely feel they have a stake in profiling.

If Microsoft and ITV can find ways to use this technology in ways that clearly benefit the ITV subscriber, they have an enormous market opportunity. Gartner forecasts that by 2003 ITV will have 20 million subscribers--twice what Gartner considers the threshold for mass adoption of any new technology. That's an enormous market opportunity for cable operators, advertisers and advertising agencies but only if ITV can convince the subscriber that it's worth the trouble and the (possibly illusory) risk of loss of privacy.

(For related commentary on Microsoft's focus on interactive TV, see Gartner.com.)

Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.