News

Another Digital Divide: Interindustry

10/10/1999 8:00 PM Eastern

The latest surreal juxtaposition of trade conferences put
the digital dilemma in perspective. Ostensibly combined under one umbrella, the separate
"Digital Hollywood" and "Digital TV Summit" events underscored the
rift between business demands and broadband dreams.

Appropriately, this all took place in Beverly Hills.

At the one-day DTV Summit, elegantly orchestrated by the
Consumer Electronics Manufacturers Association, hundreds of retailers, TV-set makers and
technicians -- but almost no digital programmers -- confronted the hard reality of getting
new digital-TV hardware into homes.

They gloried that 50,000 DTV sets have been sold (at least
at the wholesale level) in the first 10 months of availability. (Of course, that's
compared with 2 million analog sets per month.)

But they fretted that standards are still in flux --
notably the escalating debate about whether the currently adopted 8-VSB format should be
replaced by the globally adopted (except in North America) COFDM standard.

The CEMA offered a consoling dose of market research:

• More than 50 percent of customers who have seen DTV
"become very unsatisfied with analog."

• Nearly 80 percent who have seen DTV expect that the
next TV set they buy will be digital.

• A total of 95 percent of DTV early owners
"would make the same purchase again."

The research also confirmed consumers' complaints that
the missing ingredient is the lack of programming, which was in plentiful supply elsewhere
in the building.

Unlike the DTV platform -- which remains a technology in
search of content -- the ubiquitous product at Digital Hollywood was programming in search
of a pipeline. Dozens of companies showed prototypes of content that is ready for
cable-modem and DSL distribution.

There must be about 20 such broadband-content shows per
week (at least it seems like that many, since I stagger through several each month). In
the few weeks since my previous visit, another avalanche of broadband-content visionaries
has materialized, all in search of distribution, or at least presence, through broadband
platforms.

Clearly, the confines of dial-up systems have prompted
narrowband-content packagers to expand their visions. More interesting, a next wave of
programmers are starting with rich-media and streaming content solely intended for the
emerging big-pipe platforms.

In a classic mismatch of content and conduit, many of these
technology and e-commerce-driven program hopefuls seem to have barely a clue about where
this material may appear.

Their task was not made easier by the almost total absence
of cable, telco or high-speed service packagers at Digital Hollywood.

Among the eye-catching ventures debuting there were
"BreakTV.com," yet another attempt at what I call "two-minute TV." The
promoters describe it as "Like television, only shorter."

For now, BreakTV.com consists of on-demand video clips from
sitcoms such as Leave It to Beaver -- viewers can buy the entire show on cassette
or DVD -- and the company says there are future pay-per-view plans.

"Popcast.com" dreams of a more user-centric
approach, tied into personal video mail and Webcasting. Its relationships with makers of
new digital camcorders open the prospect for new kinds of two-way video programs.

"IFilm.net" is another in the growing array of
consolidators offering independent films (nonstudio productions) for on-demand viewing.

Veon Inc. privately demonstrated its technology, which was
actually adopted by Excite@Home last week; Veon's tools enable the integration of
content and commerce on broadband platforms.

You get the idea. And there were dozens more like these --
software and content, all in search of a platform.

Meanwhile, the rare cable-oriented presence offered
glimpses of the opportunity taking shape. For example, Gerard Kunkel of WorldGate
Communications shared new research about what his limited audience of Internet-on-TV
customers is accessing:

• A total of 63 percent of customers check out
WorldGate every day.

• They spend 1.03 hours per day on the service.

• The top five interactive networks (as ranked by
total number of Channel HyperLinking Sessions) vary amongst WorldGate's three pilot
markets, but they generally include NBC, ABC, ESPN and Nickelodeon's sites.

• Afternoons tend to be the most heavily used time
period, suggesting lots of school-age surfing.

I-Way Patrol columnist Gary Arlen marvels at the multilobed
conference-goers who are both suits and ponytails.

March