Carlton and Sainsbury have axed their multimedia joint venture, Taste Network. The eCommerce and advertising downturn meant the project wasn’t making any money, and the owners weren’t willing to add extra funding. Taste’s demise means it will never achieve its original aim of attracting iTV commerce revenues. However, this doesn’t mean that iTV shopping is doomed, just that Taste launched too early.

Company Profile:

J Sainsbury

Just nine months after its launch, UK media group Carlton and supermarket Sainsbury have axed their Internet/television food business, Taste Network. Carlton will take control of the Taste Carlton Food Network (CFN) food TV channel, while Sainsbury’s will take control of the website and close it. Carlton will then submit CFN to an operational review, as it faces shareholder pressure to close niche channels during the current advertising downturn.

The companies invested over $14 million in the venture, which aimed to give both firms a strong position in grocery eCommerce, by attracting customers to Sainsbury’s site with strong content rather than just low prices. In the long run, the aim was also to grab first-to-market advantage in grocery tCommerce (selling goods over interactive TV).

Taste’s death is another blow to retailer-broadcaster joint ventures, following Granada’s decision to cut jobs at its health TV channel and website Wellbeing, a joint venture with Boots. However, it cannot be blamed on a ‘failure’ of interactive TV. The venture was shut down because it failed to generate eCommerce revenues, while advertising slumped and media and eCommerce share prices both dived. As a result, external investors were not willing to put any money in either.

There was no expectation for iTV services to make any money yet – rather, the site would have ensured Carlton and Sainsbury’s were first-to-market when grocery tCommerce finally appeared. Datamonitor still expects the global iTV commerce market to be worth $110 billion by 2005.

As has often been the case in grocery eCommerce, Carlton and Sainsbury’s plan just arrived too early. There will be major synergies in future between iTV programs and eTailers, as people click on their TV to the order goods and services they see. But it’s not going to happen just yet.

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To view related research reports, please follow the links below:-

Food Information on the Internet – An Essential Guide 4th Edition

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