October 1, 2012, 12:00 AM

The road to t-commerce

An Olympian effort illustrates the potential for turning TV into an online shopping portal, but nobody’s yet grabbed the wheel.

Lead Photo

As millions of U.S. consumers watched athletes compete this summer in the London Olympics, eBay Inc. was trying to cash in and advance the cause of so-called "t-commerce." That's the marketing shorthand for the concept that consumers watching programming on web-enabled TVs and mobile devices will buy via the web products related to the shows they're watching.

In this case, the online marketplace updated its Watch with eBay feature—which launched as an extension to the marketplace's iPad app in November—for the Games. Consumers could sync the app on the tablet in their lap to the events they were watching on TV and buy from eBay's network of sellers the same types of shoes worn by sprinters, posters featuring Olympic athletes and other products associated with the event.

More than a month after the closing ceremonies, eBay wouldn't say how many products were sold via the Olympic edition of the app or how many shoppers used it, but its Olympian effort represents one of the more notable moves yet in turning the TV into a shopping portal. But while retailers and analysts see great promise, they point out that the number of companies jostling for position—including cable and satellite providers, technology firms and retailers—suggests progress may be slow.

If cable and satellite companies get on board—and they must since those companies today provide the TV signals to most U.S. homes—Internet giants such as eBay, Google Inc. and Amazon.com Inc. could fuel the push into TV commerce. But don't count out the pioneers of this field. Jewelry Television, a retailer that has TV in its blood, operates a TV shopping network, e-commerce site and mobile apps and says it doesn't plan to sit around while other web merchants get cozier with television.

T-commerce's opportunity

There's little doubt that combining TV viewing with online shopping has potential. After all, U.S. consumers watch, on average, 35 hours of TV per week, according to market research firm The Nielsen Co. And at least 60% of U.S. households use the Internet at least once a month while watching TV. From the standpoint of consumer behavior, it's not much of a step from watching an episode of "Big Bang Theory" to clicking on the remote to buy the T-shirt worn by the lead character Sheldon.

More consumers have the potential to do that every day because so many homes now have TVs connected to the Internet. Some 14 million web-enabled TVs will ship in the United States and Canada next year, up from 8 million in 2012, says Paul Gagnon, director of North American TV research at DisplaySearch; within three years, that number will increase to 25 million, meaning that up to 29% of TVs being shipped will be web-enabled.

Forrester Research Inc., meanwhile, predicts that 66.8 million U.S. households, roughly 58% of 114.2 million total U.S. households, will own at least one web-connected TV by 2016, up from more than 39 million, about 34% of households in 2011.

Tablets—another avenue to t-commerce, as shown by eBay—also are finding their way into consumers' hands. By the end of 2013, 47% of online consumers are expected to own a tablet computer, according to a survey conducted by the Online Publishers Association. And 85% of tablet owners currently use the devices while watching TV, according to Forrester Research. It is difficult to say, though, exactly how much t-commerce purchasing potential exists in the United States. "T-commerce is tiny right now, and so little is happening compared with what it will be," says Forrester analyst James McQuivey.

Different paths

Generally, t-commerce execution today take one of two paths: the approach of eBay using its app to sync with TV content and sell directly to consumers, and the type conducted via technology providers such as Shazam Entertainment Ltd. and Delivery Agent Inc., which act as bridges between the parties involved, such as the TV networks, cable providers, retailers and consumers.

With Watch with eBay, a consumer enters her ZIP code and television service provider within the app, then taps the Watch with eBay button and tells the app what program she is watching. EBay then uses keywords associated with both a show and eBay listings to produce product matches. Consumers can sort those results and bid or buy.

PayPal, the eBay-owned payment services firm, is also figuring out how it can participate in t-commerce. It recently signed deals with cable provider Comcast Corp. and set-top box maker TiVo Inc. that will enable consumers to make purchases or donations related to content they see during programs using their remote controls. It is unclear when the services will be available. PayPal said it was buoyed by its own survey that showed 49% of TV subscribers want to buy goods and services associated with shows they watch on television.

"For example, a consumer sees a commercial with a TiVo interactive tag indicating the ability to 'buy now' using PayPal," says Scott Dunlap, PayPal's vice president of emerging opportunities. "The consumer can pause the live or recorded show, complete the transaction using PayPal, and return to watch the program without missing anything, all with a few clicks of their TiVo remote."

Delivery Agent—which has raised more than $100 million in funding rounds—works with more than 40 TV channels and cable providers and sells a tool called TV Wallet. Consumers can register credit and debit cards and PayPal information with the service, and then sign in by entering their phone numbers and PINs to shop with their remote controls. Consumers' payment cards are charged for their purchases.

The company showed off its capabilities this summer by enabling buying for fans of "Picked Off," a reality series about antique hunting that debuted in July on History, a channel owned by A&E Television Networks. Some 4 million consumers who subscribe to Internet, TV and phone service through Verizon FiOS could use their remote controls to purchase replicas of collectables shown on the program.

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