Thursday - August 31, 2000

More Users to Come Online Via Television

Pay TV attracts a different kind of consumer than the PC does. In a recent report, Forrester Research outlines how today's offline population will choose the TV rather than the PC as their main point of online access. Pay TV will bring interactivity into 20 million European households this year, and by 2005 50% of European households will have iDTV. The growth of pay TV all over Europe will be the key driver for the increase of iDTV, and good interactive services and community will build customer loyalty. Email will be the battering ram for iDTV's interactive services.

In Forrester's Technographics® Europe research across five European markets -- Great Britain, France, Germany, the Netherlands, and Sweden -- some overlap was found between ownership of set-top boxes and ownership of other devices like mobile phones or PCs. But dividing users by which devices they own reveals four groups with very different demographics, attitudes, and behavior: Boxed and Wired, Leaning Forwards, Laid-back Socializers, and Digital Outcasts.

Currently three out of four European consumers do not go online from their home PC. Forrester believes that the nature of Europe's online landscape in five years' time will be defined by this group. "iDTV has the opportunity to become the major point of online access for the present offline population if iDTV companies adopt email-friendly strategies. Email is the strongest driver for online access -- cited by 66% of online PC users as the reason they go online from home. For many people, PCs are just an expensive email machine," said Reineke Reitsma, analyst for Technographics Europe.

Forrester believes that iDTV companies that satisfy consumers in terms of technology, content, and price will be able to prevent this large portion of the population from moving to PC-based Internet access. "Offering just email via TV will not be enough," Reitsma said. "Suppliers have to offer a keyboard, access from multiple TV sets, a good return path, and all this for as low a price as possible. But if they succeed, present PC suppliers will have to reposition."

"Consumers with both a set-top box and online access from home -- Forrester calls this group Boxed and Wired -- account for the smallest percentage of the population. They are highly entertainment-focused, which shows in their ownership of all types of technology and their thirst for going out. Leaning Forwards represent 17% of the population. More than 50% are high-income technology optimists. They are primarily men motivated by career or entertainment," explained Reitsma. "Thirteen percent of consumers fall into the category Laid-back Socializers, who have pay TV but no Internet access at home. They love to interact with friends. This category plus Digital Outcasts, which account for more than 50% of all consumers, will be the primary targets for winning iDTV companies."

For the Report "iDTV's New Battering Ram: Email," Forrester used results from the Technographics Europe February and March 2000 survey of 17,500 consumers. Forrester's Technographics Europe research program provides continuous quantitative information about consumers' attitudes toward and adoption of technology. By applying a unique segmentation model to survey data from both Internet users and offline consumers, Technographics offers an innovative way of developing marketing plans for any technology-based product or service.

U.S. Government to Collect Billions from the Net
Despite funding struggles and bureaucratic inertia, eGovernment will change the way authorities deal with citizens and businesses. According to a new Report from Forrester Research, Inc., federal, state, and local governments will collect 15% of fees and taxes online by 2006 -- totaling $602 billion.

"An increasingly demanding and wired public is looking for speed and convenience from its government," said Jeremy Sharrard, associate analyst at Forrester. "Even though constituents are concerned about privacy and paying convenience fees, users see the value of online government and want those services now."

Most government services and regulatory requirements involve the filing of an application or report by businesses and constituents. Governments at all levels will receive 333 million online submissions by 2006. State governments will receive the most -- 137 million in 2006 -- fueled by online business reporting. By 2006, authorities will roll out almost 14,000 total online service applications nationwide. The majority of these services will come from the nation's 35,000 cities and towns.

eGovernment adoption will evolve through three phases: experimentation, integration, and reinvention. Governments' initial forays onto the Net over the next 24 months will continue to be marked by a smattering of low-risk, clearly bounded, constituent-focused services online. Applications will be simple, posing little privacy threat to users, requiring minimal identity authentication, and calling for a low level of system integration. Volume will be low also, due to the lack of technological sophistication that will keep 90% of cities and towns from offering eGovernment services until 2002.

Expectations for online government will rise quickly as citizens incorporate private sector eCommerce into their daily lives between 2002 and 2005. This will force governments to respond with business-focused services as well as more sophisticated, customer-centric offerings that require integration among multiple departments and address privacy concerns. But linking different departments' legacy systems will slow deployment as authorities struggle to tie their systems to new payment and authorization services.

In 2005 and beyond, legislative mandates will drive the organizational reinvention necessary to synchronize governments' processes and jurisdiction with their Net front ends. Once constituents and lawmakers see the structure of their government laid out before them on the Web, they will question why so many departments offer overlapping services. By consolidating applications and building easy-to-use sites, government will eventually become less visible and constituents will become more autonomous.

"By 2005, local governments will receive federal funding to bridge the digital divide controversy -- making eGovernment services available to all constituents," added Sharrard.

For the Report "Sizing US eGovernment," Forrester interviewed CIOs and other heads of eGovernment efforts at federal, state, and local governments that have already begun eGovernment implementations, as well as five international governments.

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