Information society : agenda for action in the UK : evidence received after 31 March 1996 / Select Committee on Science and Technology.

  • Great Britain. Parliament. House of Lords. Science and Technology Committee.
Date:
1996
Catalogue details

Licence: Open Government Licence

Credit: Information society : agenda for action in the UK : evidence received after 31 March 1996 / Select Committee on Science and Technology. Source: Wellcome Collection.

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    4 June 1996] [ Continued Lord Craig of Radley contd.} three times when they just have to press a button than when they have to call up on the telephone. (Mr Burrell) Certainly with the cable infrastructure that is coming very, very soon, looking at companies such as Videotron with their backpath system, that would become a reality in the near future. There have been a number of different projects that have gone through and failed, I have to say, to produce the purchasing version of that and in fact we in Britain are far more adept at using one of these to negotiate purchasing with than a lot of other nations because of our high use of Teletext. We are used to using this as a navigator, not just as a channel surfer, but actually using page numbers to page through and in fact Teletext was one of the aborted products that tried to put a “buy” button in. There was a project funded by Philips in Austria and Germany which wanted to put a “yes” button in the next family of Teletext chips which then dialled back through the PSDN network to make a purchase. Unfortunately it reached its first feasibility stage and they could not get the cost of this down low enough to get it out into the market. It will come and I think pay-per-view may well be one of the leading applications that gets the price of this down far enough to get it out into the market because then if you can do that, you have not got the sit-up-and-beg version of buying from the computer where you have got to type it all in, but you can sit back and be comfortable in your armchair and just do it like that. It will ask you to confirm and you will have to have an account set up first, but with most catalogue operations you do anyway. Lord Hollick 841. You have emphasised the attraction of full- motion video to viewers and I can see it is an appealing feature, but you described earlier how you could be able to use a computer to help you search for the precise plants that flourish in a certain environment, and that is only available if you have a computer and you are on-line in effect. Has your parent company in the United States migrated this service into an on-line world with full-motion video? For instance, are you participating in the Orlando experiment that Warner’s are doing and what has been the result of any experimentation that you do in that area? (Mr Suckle) We have a QVC home page which has information and two-dimensional illustrations. I have a tape if you are interested, but it is like almost any other Internet retailer now where you dial up or call our home page and then you wait until the illustrations download and you drum your fingers for a little bit, the hour glass is there and then the illustrations are there. It is two-dimensional. There is a search function that we have available so if you wanted to buy a coffee maker that also had a cappuccino function as part of it and you wanted it to be for ten cups or more, you could essentially specify that and search for that. We have not been doing any experiments so far with the Orlando experiment or any of the other ones having to do with full-motion video. However, there are a number of experiments going on right now having to do with cable modems and when cable modems become introduced and the band width and the ability for you to be able to provide the data down the line and at a very, very much faster rate is when we will be looking to do those experiments or those trials. We are, as I said, retailers at heart and we are looking for not any particular way of reaching people, but we are looking for an audience and a large audience at that. Chairman 842. The penetration in the United States is clearly much greater. Is that dependent on or a function of how long you have been operating in the United States or are there additional features, such as the greater use of cable modems or cable television in the United States than in the UK? (Mr Suckle) Well, our penetration to our audience on a per-home basis in the United States versus the UK is actually the same as QVC was in its second year of operation, but there are only 5 million homes which are connected up to cable and there were many, many more homes that were connected up to cable seven years ago when QVC was in its second or third year, so the inhibiting factor is the number of the homes that we can reach, but otherwise the model is very, very similar and we are doing about the same per home as QVC did in its second or third year and the home shopping market in the United States right now is dominated by two players, QVC and Home Shopping Network, and they do essentially about 3 billion in turnover and they reach somewhere around 60 million homes, so one way youcan look at it is that the industry, this kind of television shopping is doing around $50 for every home that it reaches. If by the turn of the century we have 10 million homes which are connected up to cable and satellite, then our industry will be of the 300 million scale, which is a sizeable business, but it is not really huge compared to retailing and we are the most successful in this area so far. Baroness Hogg 843. The figures you gave us at the beginning indicate that at the moment in the UK you are doing something like $15 per home, so you would expect a relatively modest growth over the next three or four years in sales per home and the main drive you would expect to come from penetration. Have I got the balance right? (Mr Suckle) I think that we would consider it to be a substantial increase in penetration, perhaps 25 per cent a year, in the sense of growth on each person we have, but of course cable and satellite is growing by approximately a million a year, so if you start with 5 million, there is another 20 per cent increase there in its first year. As the base gets bigger, that million becomes a somewhat smaller percentage each year. 844. But do you expect yourselves to work up a learning curve as to how to use these techniques to sell goods because it does not seem, even if you get it up to $50 per home, that that is very high and, as you say, you are the most successful? What is the inhibition on sales growth here, do you think?