Microsoft, Tandy: Working the LCD Equation by Denise Caruso Anyone who's trying to tap the Mother Lode of the consumer market for interactive media is trying to figure out the LCD equation. Getting interactive technology into the hands of the Lowest Common Denominator of users represents vast market potential, and it's those dollar signs that drive every company, from Philips with its CD-I black box to Apple with its low-cost Mac line. But just what is the LCD for interactive media products? It depends on who you are and where you sit. If you're hardware giant Tandy or software monolith Microsoft, you likely can sit anywhere you want. Which is why my meeting with the two companies last month -- discussing their joint "multimedia PC" venture -- was especially interesting. Most vendors come down on one side or the other between PC-based television (i.e., multimedia products running on a PC) and TV-based computers (CD-I and Commodore's CDTV project). But I don't believe that's the schism at all. The core issue for tapping the consumer market is finding a way to provide interactive titles across a wide variety of platforms and vendors, in a way that doesn't require the user to do anything but pick what level of functionality they want. It's no surprise that Tandy sees the consumer market for multimedia computing as the Holy Grail. It's the largest consumer electronics company in the U.S. "We have strong beliefs and ideas about where we could head" with multimedia, says Howard Elias, Tandy's vice president of computer merchandising. And as you would expect, because of Tandy's enormous success in the low- end PC business, it doesn't much cotton to the idea of either expensive PC- based multimedia or to the black-box component concept represented by such products as the Philips/Sony CD-I player or Commodore's CDTV. "CD-I is one way to get to a true consumer device, but it's not the only way," says Elias. Though Rob Glaser, general manager of Microsoft's Multimedia Systems Group, wouldn't comment on the software giant's relationship with IBM's multimedia development group, Microsoft's level of commitment to the Tandy project makes it clear that it, too, is opting for a shot at the Holy Grail -- at least for now. The Microsoft-Tandy strategy is based on "drawing a line in the sand," as Elias describes it. They've decided that a "basic multimedia PC" is a 10MHz, 80286- based PC with VGA-level graphics and a built-in CD-ROM drive, running Microsoft's Windows 3.0 with multimedia extensions. "That's what we think it should be," says Elias. "What we're saying is that if you already have a 286 with VGA, we'll make sure that the system and application software is written to that specification and will function with adequate performance." He's got good reasons to support that configuration. By the end of calendar 1990, Tandy predicts there will be more than nine million CPUs in the United States with 286 performance or above, and with VGA or above. Tandy hasn't released the specs for the new multimedia PC it will ship in the first quarter of 1991, but its importance pales next to the fact that the company is also preparing a very competitively priced upgrade kit that will ship to owners of any one of those nine million 286 machines, whether Tandy-labeled or not. Now that's what I call market potential. In preparation for what could be an onslaught of demand, Glaser says Microsoft is extending Win3 for multimedia applications (with support for sound, device control and image manipulation), and is also fostering the development of "mo' better" authoring tools. And most significantly, it is doing what no other firm has had the resource to do: it is aggressively seeking out people and companies to create titles for the machine in the business, education and home markets. At the meeting, Microsoft showed 11 CD-ROM-based products, ranging from a multimedia Bible to a monthly CD-based online shopping guide. With permission, Microsoft even prototyped a CD-ROM version of ABC News Interactive's famous Martin Luther King videodisc, though no products on the base platform will be able to support full-motion video as it's used in ABC's Mac-based products. Glaser says he expects that Microsoft may finance some titles directly, but will mostly play matchmaker between developers with ideas and information providers who have the money to package and ship products. He's hoping that Microsoft will be able to sponsor a developer's conference for the new platform some time before the end of 1990. Tandy's Elias also correctly sees software as critical to the success of their venture. Most software packages to date have been written on what he calls the 80-20 split -- 80 percent code and 20 percent content. "But there are a lot of forward thinkers out there who can flip that ration to 80 percent content." Although the two companies are trying to shift the talk away from price- performance and toward adding value, I'm not sure it will work in the long run. The availability of an instant installed base in the millions is certainly an impetus for developers, but there's no avoiding the fact that the operating systems is built on Windows, which is build on DOS, which is clunky for handling the kind of machine sleight-of-hand required for good interactive media products. There's another very important point, and one that shouldn't be lost in the more nerdball aspects of this discussion. The consumer will always follow full-motion video, because that's what they already know. And there's just no way for a 10 MHz 286 chip running Windows to handle full-motion. In Microsoft's defense, Glaser is very clear that he's only talking about an entry- level multimedia system at the moment, that the work being done today will be a bridge to higher performance systems. Still, the problem comes back to the old bugaboo of the lowest common denominator. The CD-I/CDTV argument that consumers will only pay $1,000 for a new piece of home equipment has been proven repeatedly. Will people fork out more than that for a multimedia computer? It's a big question mark. I'm heartened to see that Glaser and Elias aren't shying away from the bigger issue of compatibility, though. "Bill (Gates) talked to senior management at Philips, and told them that choosing a 'funny' (i.e., non-standard) operating system for CD-I had an element of blitheness to it," says Glaser. But Glaser also says that 80 percent of the world's PCs are DOS-based, and by "taking them to multimedia, the future will take care of itself." This attitude also has an element of blitheness to it, though certainly to a lesser degree than a company like Philips with an installed base of zero. In any case, the Tandy- Microsoft project has its heroic aspects. Their version of the multimedia PC is certainly the No. 1 contender for proving what the market will bear.