Tales from the trial trail: Videotex progress in the United States

Transcription

1 Tales from the trial trail: Videotex progress in the United States by GARY H. ARLEN Arlen Communications Inc. Washington, D.C. ABSTRACf With about three dozen experiments and services under way or in preparation, the U.S. videotex industry is in the midst of lively growth. A number of factors will affect the immediate prospects for commercial services, especially the break-up of the Bell system and the activities of the resulting companies. In addition, the development of cable TV and the creation of hybrid interactive services using other new technologies will affect the growth of videotex and teletext in the U.S. Moreover, pending legal issues may shape the development of videotext services. 513

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3 Videotex Progress in the United States 515 INTRODUCTION Videotex and teletext in the U.S. are about halfway through their incubation period. The first round of experiments has been completed; the pioneering commercial ventures, such as CompuServe and the Source, are refining their activities based on experiences during the past three years. As the second round of trials begins and with an eye toward new commercial ventures, the infant videotex business looks to 1985 before it becomes a viable business venture. Of course, a number of other services and projects will have spurted ahead by that time. Indeed, the development of videotex is on an erratic timetable because of the variety of projects being tested and proposed independently by a wide range of organizations. Moreover, since there is no unified, single approach to these services-nor any consensus about how they should be developed-many questions continue to loom over the upbringing of the business. Even the terms videotex and teletext continue to be the subject of debate and individual interpretation. Generically, these interactive information retrieval services are often referred to collectively as videotex. But that term also refers to the two-way, fully interactive system offered via telephone lines or two-way cable TV systems. Teletext is a one-way system, with a far more limited database, transmitted via digital encoding within a broadcast or cable TV signal. Both services offer alpha-numeric messages and some form of computer graphic images, which the user can call up through a keypad. In the most sophisticated videotex systems, online transactions, including shopping, banking, or electronic mail, can be accomplished, often by gateway connections through the videotex system into a remote computer maintained by a third party. Table I offers a portrait of the fragmented videotex and teletext universe in the U.S. In addition to the services listed here, several other test projects have already been completed. Moreover, the public projects listed do not reflect the handful of private/closed user group videotex trials being explored internally at an increasing number of companies. In Table I, (T) indicates a test, generally with no fee to users; (C) indicates a commercial service. The development of the above-listed projects-plus the inauguration of services by still other companies-is taking place amidst continuing debate about factors that will affect the growth of the industry. Most significant is the continuing battle over technical standards, which shows little sign of abating. With its multinational heritage, videotex has generated endless controversy about standards. The issue of technical standards--especially whether a format based on British, French, or Canadian technology should be used-will remain a stumbling block for the immediate future. The development in of a so-called "North American Standard" (based on Telidon and Antiope formats) has not been universally accepted. Indeed, the U.S. delegation to CenT has suggested the creation of a Unified Presentation Layer (UPL), which will require a new microprocessor chip able to accommodate the European and North American formats. There is no indication when such a device will be available. Meanwhile, the Federal Communications Commission is encouraging a marketplace approach to technical standards. That means no formal technical standard will be adopted for the U.S., allowing individual companies to sell whatever format they prefer. This encourages grueling competitive efforts as different camps seek affiliations with companies that can help create a customer base for their system. In the teletext area, for example, this has led to promises by two major national broadcast networks (CBS and NBC) that they will use the North American Broadcast Teletext Standard for their transmissions, which are beginning in Meanwhile, a major cable-satellite network (Satellite Syndicated Systems) is developing a national Keyfax service using British teletext technology. This, of course, could lead to substantial problems if customers in a single location seek data from different sources using incompatible technology. Hence, the uncertainty about technical standards is likely to continue for the next few years. NATIONAL OR REGIONAL; PRIVATE OR PUBLIC The nature of the North American market suggests that the most valuable electronic services will be ones that cater to specific audiences--even if the only thing which binds them is a common geography. That means regional videotex and teletext services are most likely to be implemented, although some national services will be created. Many major newspaper and broadcasting companies are developing databases for their local and regional markets. This seems to be a sensible approach since most media companies have extensive resources to develop advertising and information from their current service territories. The viability of such regional services is already being tested and in one case there is evidence that the business is not there, at least not yet. A. H. Belo Co., publisher of the Dallas Morning News, closed its BISON local electronic publishing experiment in mid-1982, in large part because there weren't enough owners of personal computers in its operating territory to justify the project. Like other companies, Belo suggests that when the number of users equipped with proper terminals increases it will re-enter the business.

4 516 National Computer Conference, 1983 TABLE I-Videotex and teletext activity in the U.S. (January 1983) UNITED STATES Current Services The Source CompuServe Dow Jones CBS-AT & T Videotex (New Jersey) ContelVision (Virginia) Pronto (Chemical Bank, NY) HomeBase (Citibank, NY) Shawmut Bank of Boston Chase Home Banking (Chase Manhattan Bank, NY) MacroTel, Inc. (Empire Bank, Buffalo) BankShare (Huntington Bank, Columbus) Day and Night Video Banking (First Interstate Bank, LA) FirstHand (First Bank Systems, Minneapolis) Bank-at-Home (Financial Interstate, Knoxville) INDAX (Cox Cable) San Diego Omaha Times Mirror Videotex (Palos Verdes & Mission Viejo, CA) StarT ext (Ft. Worth) Electronic Editions (Spokane, WA) Harris Electronic News (Hutchinson, KS) AgVision (ELANCO, Indianapolis) Louisville Courier Journal (Louisville) A-T Videotext (Tiffin Advertiser Tribune, Tiffin, OH) Time Video Information Services (San Diego and Orlando) Keyfax National Teletext WETA-TV (Washington) WKRC-TV (Cincinnati) KPIX (San Francisco) KIRO-TV (Seattle) WGBH-TV (Boston) KSL-TV (Salt Lake City) San Francisco State University TeleCaption (NCIISears) Future Services Viewtron (South Florida) ViewcomJGrassroots (Bakersfield, CA) Number of Users 24,854 (C) 34,100 (C) 54,000 (C) 300 (C) 12 (T) 200 (T) 285 (T) 600 (C) 500 (T) l00(c) 350 (T) 171 (C) 140 (T) 58 (C) 850 (C) 45 (T) 30 (C) 400 (T) 350 (C) 10 (T) 40 (T) 75 (T) 21 (T) 25 (T) 5 (T) 44,000 (C) 60,000 (C) Scheduled Operational Date Summer The development of regional services leads to the issue of other kinds of special-interest videotex systems, specifically business-oriented ones for closed user groups. The issue of private or public videotex has not yet surfaced in the U.S. to the degree it has in Europe, although a number of companies (such as Videodial [using French format], Rediffusion [promoting British technology] and ModComp) have recently entered the U.S. market offering turnkey private videotex systems. IBM's entry into the U.S. videotex market came in the form of a private viewdata system, based on its Series I minicomputer. It is difficult to foresee at this stage how effective such private systems will be, especially when the concept of videotex is still being defined to corporate customers. BEYOND BELL American Telephone and Telegraph Company's divestment of its local operating companies and its new-found freedom to enter competitive business activities-notably data processing-will inevitably change the nature of the U.S. telecommunications industry. Because AT & T has plans involving several aspects of videotex, the company's future activities will play a great role in shaping the development of the business. The spin-off process will last until 1991, a vital period in the development of videotex. AT & T has already begun to unveil its videotex products, including the highly regarded Frame Creation Terminal. Bell and its soon-to-be-divested local affiliates are working on distribution systems that offer voiceunder-data transmission capabilities, ideal for simultaneous use of teiephone service for conversation and videotex. Typically, AT & T is not proclaiming its precise plans as the divestiture process begins. Through its participation in several videotex efforts to date (notably, the Viewtron service with Knight-Ridder Newspapers and the Venture One project with CBS), AT & T is gaining expertise in all aspects of operating a videotex service. It is possible that when the legal restrictions are lifted in a few years, AT & T will expand its role into information services. Meanwhile, the restrictions to keep AT & T out of electronic information may prompt newspaper publishers, who once feared Bell's presence and lobbied hard against it, to drop their own electronic activities. Now that Bell is barred from such services for the time being, the publishers may not feel motivated to pursue any efforts of their own in this area. THE ROLE OF RIVAL TECHNOLOGIES Even as videotex and teletext struggle to find a niche in the U.S. marketplace, other technologies, as well as hybrid services involving videotex, are surfacing. To many experts in the data processing and communications business, all of these services are the raw materials with which to build entirely new ventures. For example, the traditional concept of broadcast teletext (vertical interval transmission of news and information) is being amended by forays into full-bandwidth data transmission using video channels on cable TV systems or satellites; Time, Inc., is particularly active in this area. Other data transmission efforts involve piggy-back projects in which text/data services are carried on the subcarrier frequencies of radio stations or satellite signals. An example of

5 Videotex Progress in the United States 517 this is a service being proposed by National Information Utilities Corp. and National Public Radio. The primary objective is to offer local one-way data communications to business offices seeking an alternative to expensive "last mile" delivery-a service that will become more expensive as local telephone rates increase. Local data will be carried via a subcarrier on FM radio stations; for clients who need national distribution of data, the nationwide public radio satellite network will provide interconnection. Several other types of transmission systems can also deliver similar one-way service. For example, low power TV-a broadcast service with authorized transmissions within only, approximately, a 15-to-20-mile radius-is often mentioned as a medium for such local data distribution, possibly using teletext-like facilities. In addition, Multipoint Distribution Service, a local microwave transmission facility, is being promoted for its wireless cable potential. (It should be noted that the development of both these technologies is still in the hands of the Federal Communications Commission.) Meanwhile the cable TV industry, which now reaches about 34% of U.S. homes, is increasingly attracted to data and text services. Almost all major city cable systems now being built offer substantial capacity for interactive services. During the late 1980s and 1990s, many of the cable systems built 20 years ago will be upgraded to include advanced interactive capabilities. At the same time, the cable industry is beginning to interconnect systems serving contiguous cable operations. SHOPPING AND BANKING A great deal has been written about the prospects for electronic at-home shopping and banking on the new systems. Indeed, more than a dozen U.S. financial institutions are already taking part in advanced tests and many more companies are eyeing such participation. Equally important, the shifting regulations and corporate objectives of U.S. financial companies augur an even greater move into such services during the mid-to-iate 1980s. In particular, a number of national banking regulations that have so far restricted home banking efforts will be changed. At the same time the financial realities of the early 1980s have resulted in the creation of new financial empires-businesses that transcend the traditional concept of locally owned banks. A number of nationwide financial service companies are being created and their expertise and capital resources will encourage the growth of the teleservices industry. Moreover, the role of companies such as Sears will increase. Sears, for example, seeks to coordinate the real estate and brokerage services it recently acquired, blending them into its existing insurance, banking, and retailing activities. Add to this Sears' ability to sell and service consumer electronics products and it becomes a mighty force for teleservices. Elsewhere on the merchandising scene, retailers and direct marketing firms are escalating their efforts into electronic selling. Many of them are still awaiting technical refinements, such as the ability to offer video-on-demand to prospective customers. There is, however, lively interest in the possibilities of electronic shopping, although most merchandisers are still demanding proof that the service will result in cost efficiencies before they commit themselves to any further development. CONCLUSION The videotex experiments and services in the U.S. have had mixed results to date. The trials generally indicate that information alone is not enough to sustain services, that viewers require additional features, especially transactional services. The precise nature of those services, and the mixture, are being refined by other projects. Meanwhile, the onrush of alternative services and delivery systems will continue to affect the development of videotex and teletext. The de facto decision to determine technical standards in marketplace competition rather than by government fiat will mean that it takes longer to settle on a format. In turn, that leads to further delays in introducing services to public and private users and in convincing them to invest in such services. Despite these factors, the parents and guardians of the U.S. videotex industry continue to have great hopes for the healthy development of their child. During the current incubation period, a variety of modifications are inevitable. By the mid- 1980s, when the business reaches its next stage of development, some of those questions will have been answered.

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