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AOL's new iDTV service fails to impress

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AOL's decision to expand into interactive digital TV (iDTV) has yet to impress analysts.

The new service, announced on Tuesday, offers a range of AOL services such as instant messaging (IM) and email as well as news, sport and weather. The service is available to AOL users in 6 million homes in the UK hooked up to Sky's digital satellite TV service.

It's accessed using the TV remote control and forms part of the giant Internet company's "AOL Anywhere" policy of making its service accessible on a number of different platforms.

The iDTV service isn't designed to replace AOL's usual operation. Instead, it's seen as something that might prove convenient for AOL users giving them another way of accessing email or IM.

However, Forrester has reservations about the move. In particular, it claims the cost of the service is likely to turn-off potential customers. For instance, anyone dialling into the service is charged 0.12p for the connection and then per-minute for the cost of the local rate call.

This, says Forrester, will restrict take-up in much the same way that dial-up charges held back the growth of Internet use before the introduction of flat-rate tariffs. Instead, analysts believe AOL should opt for an unmetered service in a bid to attract punters.

Then again, Forrester isn't all that convinced that punters are necessarily going to want to use it even if the pricing structure is altered.

AOL says that the strength of this service will be its ability for people to use email and IM. Forrester disagrees. According to Forrester's own research IM and email on iDTV only appeals to a small minority of users.

For instance, it found that only one in ten of UK consumers with interactive TV have used iDTV email, while nine out of ten of UK online consumers use Web-based email.

Forrester's verdict? AOL needs to do more to make this work. ®

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