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Content Conference Shows Hollywood Yearns to Learn

7/04/1999 8:00 PM Eastern

Culver City, Calif. -- It was held on the Wheel of
Fortune
set, but a conference staged by MediaOne Group Inc. here last week to educate
potential developers of broadband content might have been housed more appropriately at the
Let's Make a Deal digs.

Executives from the Road Runner cable-modem service hosted
more than 250 new-media developers and other Hollywood honchos at a broadband developers'
conference in an effort to sell them on speed.

There was certainly an appetite for the information:
Initially set up for 200 attendees, conference backers had to go to the fire marshal for
approval to put more chairs in the soundstage, and they still ended up turning interested
producers away.

The day's message? Be our partners in early content
development and think beyond "repurposed TV" -- that is, free TV content rerun
on the Web.

MediaOne vice president of Internet services Tom Cullen
admitted that it would probably take two more years before cable modems reach profitable
penetration. Cable modems will be deployed in only 220,000 Road Runner homes by the end of
this year, he said.

But content developers can build awareness and market share
by investing in high-speed content now, MediaOne executives argued.

Audience feedback made it clear that MediaOne would have to
revise its marketing strategy to forge some of these partnerships. At the moment, Road
Runner's predominant message is "fast." Producers indicated that they expect
marketing support if they are going to spend development money.

Vice president of marketing and sales Kelly Ruebel
indicated that Road Runner was about to make a marketing shift.

In its current markets, Road Runner has captured the early
adopters, and the service has done focus groups to determine how to best sell modems to
more resistant consumers.

They found that nontechnical consumers are confused about
the speed issue. Asked their preferences between 56.6-kilobit-per-second modems and
1-megabit-per-second modems, respondents picked the former "because it's
bigger," Ruebel said.

New campaigns should focus on ease of use and the capacity
to change the way people use the Internet, she added. MediaOne also uses its video
capacity to drive traffic to current programmers, showing profiles of content providers
once a month, she told potential producers.

Consumers aren't the only ones who are unclear about the
concept.

"We wanted to know what they meant by
'broadband,'" two executives from Internet-production firm Rampt said when asked why
they came. "We think we understand now."

Other misunderstandings were revealed. When asked if they
already worked over high-speed-data lines, about 40 people raised their hands. One-half of
those people were using cable modems. The rest use digital subscriber lines from the local
phone company because modems are not available in their areas.

But one man said he'd heard that cable modems could slow to
56.6 kbps during heavy traffic. Thus, he'd opted to get "his own" line.

This prompted a frustrated Cullen to shout from the
sidelines -- three times to make sure he was heard -- "All networks are shared!"

Content that works well in a fast, video-streamed
environment, Columbia TriStar Interactive vice president of online services Rob Tercek
said, includes exchange (online auctions or directories); "metacontent," which
offers not just content, but context; and incomplete content, such as games.

He agreed with MediaOne in advising against envisioning a
TV network on the Web. "Free TV's market is disintegrating, and you'll just
accelerate that," he said.

Revenue is possible during the high-speed-data platform's
formative years, but not profits, ZDTV producer of broadband content John Gilles said.
Sources include rich-media ads, which harvest data from users for sale to others;
transactional ads; and bounties from partners and service fees.

"You probably won't make money for a while,"
Gilles said, noting that with costs at 5 cents to 20 cents per stream, popular sites prove
the most expensive to developers.

"But your model helps to reserve market share"
until the eyeballs are there, he added.

Anthony Bay, general manager of streaming media for
Microsoft Corp., advised developers to examine the World Wrestling Federation's Web site,
which he described as the most visited nonporn site on the Web.

The WWF is a leading innovator on the Internet, he said,
vacuuming incremental dollars out of the pockets of fans with streaming video for sale of
pre-bout pay-per-view programming, merchandising and other uses.

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