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iTV poised to open vast new revenue stream to broadcasters

Revenue from games and gambling via interactive television in Europe will reach $3.6 billion as broadcasters identify these activities as new revenue centers, according to a report released earlier in the year by Datamonitor.

The report, “iTV games and gambling in Europe: Service and business model development to 2007” identified the entertainment focus of television viewing as the key to exploiting new iTV services.

Last year the Western European iTV market generated about $300 million through gambling and games within dedicated game channels like Gamestar and PlayJam. As broadcasters recognize the revenue potential that iTV offers, they will increasingly use the technology to enhance their programs, command a greater share of the viewing audience and benefit from greater ad revenues, the report said.

The Datamonitor report identified Fox Kids and the Cartoon Network as two children’s channels that already have launched branded iTV games channels. Increasingly, iTV games will be associated with programming, especially primetime entertainment shows, the report said. Additionally, iTV enhanced shows will allow viewers to play along with on-screen contestants.

Gambling via iTV will explode, increasing the size of the betting audience and how often wagers are made, the report contends. TV rights holders to sporting events, such as racing and football, will be in an especially strong position to accelerate the growth of iTV gambling and benefit from the increased revenues that result.

The report forecasts that iTV support of lotteries across Europe will dominate gambling revenues by 2007 due to the current size and popularity of regional and national lotteries. Casino-like gaming will be only a small source of iTV gambling revenue because of tighter government restrictions and a smaller audience.

“The entertainment focus of TV creates many synergies with the games and gambling industries, enabling operators and channels to enhance the TV experience and thereby drive viewer loyalty to the platform and potentially increase audiences for individual programs. The ability to play along with a game show or place bets during a sports event will prove very compelling, increasing viewer involvement, while independent services will help retain viewers in between programs,” said Datamonitor iTV analyst Chris Tant.

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