CHANGES AFLOAT FOR THE MPC SPEC?

Rumors are swirling that the MPC Marketing Council is about to revise the specification for the Multimedia PC. According to Marc Miller of NEC, chairman of the council, “a Level II specification is under consideration and review by the technical subcommittee.” While he didn’t want to discuss any specifics of the changes being considered, such as minimum hardware or processor speed, he said that the changes should be considered “as an evolution of the first-level spec.”

Creating a minimum specification is a problematic task, considering how quickly technology changes. By the time any specification is completely implemented and new software is created to take advantage of it, the next generation of hardware is out. This is especially difficult for an organization that is attempting to define the hardware for the benefit of software developers.

According to Mike Grubbs of Tandy (and the past-chairman of the council), “to define a multimedia spec from a components perspective is futile in a world that changes every four months.”

(The obvious truth of this sentiment is likely to be an excellent marketing tool for Kaleida Labs’ cross-platform authoring tool, ScriptX. See story on page 12.)

The technical subcommittee will continue to evaluate options for the MPC, and an update on the process is expected to be made at the Intermedia conference in San Francisco this week. The council is also expected to announce a certification process for hardware platforms, to ensure that all MPCs on the market truly meet the current specifications.

HEARST NEW MEDIA GROUP HAS SIKES AT HELM

The Hearst Corporation recently made public its plans to play a role in the convergence between entertainment media and digital technology.

The New York-based communications company, which is one of the largest diversified media companies in the United States, has formed the Hearst New Media and Technology Group in New York. To run the new venture, the media giant has hired Alfred Sikes, the former chief of the Federal Communications Commission. Sikes, who left the FCC this past January, is expected to begin work this week.

The New Media Group’s charter is twofold. First, the group is expected to uncover new ways to exploit the corporation’s massive media library, which includes content from the company’s book group, 13 consumer magazines, 17 newspapers, six radio stations and six television stations. According to Sikes, the group will adapt present editorial and programming resources to the new formats and delivery systems being created by advancing technologies.

The second mission of the group is to build worldwide partnerships and alliances with companies that are committed to using emerging technologies to create new information, entertainment and education services for consumers. (To date, no such partnerships have been announced.)

Sikes sees this opportunity as the culmination of his work in Washington. “I now have the opportunity — working with one of the best-endowed publishing companies in the world — to use advantageously the transforming technologies that were pivotal to the vision of Telecom 2000 and my work at the Commission.” Telecom 2000 is a study initiated by Sikes during his tenure at the FCC that examined and researched the media world as it is expected to be at the turn of the century (see Vol. 2, No. 1, p. 9).

Sikes will report to Hearst president and CEO Frank Bennack Jr.

3DO SETS STOCK OFFERING SANS PRODUCT OR REVENUE

The 3DO Company of San Mateo, CA, continues to amaze its prospective competitors. The company, which does not yet have a shippable product but does have a multi-million dollar deficit, has announced its plans to sell 2.1 million shares of common stock at between $10 and $12 a share.

If you consider that this proposed initial public stock offering involves only 10 percent of the company, then 3DO’s total value is estimated somewhere in the $300 million range — not a bad number for a company that has only shown technology demonstrations of its Interactive Multiplayer consumer device and has a $13.2 million loss on the books as of January 31, 1993. According to company representatives, that figure is expected to increase, not decrease, throughout this year.

In addition to the proposed sale of common stock, the company also plans to sell 100,000 shares to Trip Hawkins, 3DO founder, president, CEO and chairman of the board, in a non-underwritten sale. This means Hawkins will get to deal direct and not have to pay the mark-up to brokers that the general public will pay. He will still pay about $1 million for the shares. (The proceeds per share of stock to the company will be the same.)

This is very interesting — and unusual. Usually principals sell stock when a company goes public. In this case it seems that all of the money is going to the company and none to the original investors, which include Matsushita of Japan, Time Warner, AT&T and the Palo Alto venture capital firm Kleiner Perkins Caufield & Byers.

Despite the risk factor, some industry analysts expect the company to sell out the offering — if it receives the necessary clearance from the U.S. Securities and Exchange Commission. (The process usually takes about six weeks and was still under way when Digital Media went to press.)

Others in the industry are getting belly laughs over the 3DO prospectus, a fascinating document that exposes many weaknesses in the 3DO strategy — not the least of which is the fact that no one knows whether the player’s chips can be manufactured in volume. “3DO is the ultimate transfer of risk to the public,” says Jim Clark, chairman of Silicon Graphics in Mountain View, CA.

Hawkins is obviously hoping his proposed commitment to invest $1 million of his own money in 3DO might instill enough confidence in prospective buyers to counter the high risk of investing in a company with no product.

The fact remains, however, that this resembles a Biotech offering far more than it does a typical computer technology offering. (Biotech, however, doesn’t have competitors the likes of Nintendo or Sega.) The company is going public at a high valuation before it ever ships a product. If it is successful, however, the benefit to 3DO is a substantial war chest, since it is possible the company could raise $30 million from a successful offering.

SOUTHWESTERN BELL BUYS INTO CABLE COMPANY

Southwestern Bell might just become the first Bell operating company in history to purchase a U.S. cable company. In a recent joint agreement announcement with Hauser Communications Inc., the telco stated its intent to purchase two cable systems in the Washington, DC, area for $650 million from Hauser.

According to the terms of the agreement, Southwestern Bell is expected to pay about $2,900 per subscriber for Hauser’s 225,000 cable homes in the Montgomery County, MD, and Arlington, VA, area. (The systems have 68 and 58 channels, respectively.) Given the soft market for cable systems, this appears to be a steep price tag, even for these two affluent communities in the DC area.

The transaction is subject to regulatory approval and will not be completed until after July 1993. Officials at both Southwestern Bell and Hauser say they don’t foresee a problem with acquiring regulatory approval, however.

Although legal under the Cable Act of 1984, it has been near impossible to date for a regional Bell operating company to purchase a cable company outside of its service areas because RBOCs are prohibited from participating in both owning programming and providing long-distance services, but are guaranteed local telephone monopolies. Pacific Telesis, for instance, dropped its efforts to acquire a Chicago area system after waiting for two years for the U.S. District Court Judge Harold Greene to grant a waiver that would have permitted Pacific Telesis to import satellite and other distant signals.

But Southwestern Bell’s interest in cable is part of a growing trend among the RBOCs, which have fought long and hard for the right to deliver lucrative video programming despite their total lack of experience in this market. Ameritech and Rochester Telephone have also announced their intentions to enter the cable television service market in the United States. Each of these companies is proposing to the FCC that it would give up its local monopolies in exchange for the freedom to provide cable television and long-distance phone service.

In effect, the telcos are lobbying for a level playing field, in which all of the telecommunications industries would be able to offer all services. Whether this is the right approach has yet to be seen. The most common complaint is that the owners of the highways or infrastructure should not be allowed to control or own the traffic that flows over those networks, a situation that would severely disrupt cable television operations as they are conducted today.

Southwestern Bell is no stranger to providing cable services. In addition to providing telephone service in the South and Midwest, the telco sells cable service to 1.6 million homes in the United Kingdom and Israel; it also owns a cellular telephone service in the Washington, DC, area.

BEDEVILED BY LACK OF PRODUCT, OR BY ASTRONOMICAL COST?

The multimedia age, such as it is, with more than a dozen potential standards and mostly optical media, is bedeviled by the lack of much interesting product. Sure, you can blame the lack of standards. Or the slow access times in the present standards making interactive video a dream. Or the lousy, kludgy authoring systems. Or, above all, the lack of imagination.

But look at it another way; how much does it cost to develop a product in each of these media?

The real answer is we do not know. Many products have taken several years of a developer’s or developers’ lives and they did not get fully paid. Other times, such as in the case of the Desert Storm product from Warner New Media, the price tag of $60,000 did not really include much of the time spent by executives and others or much in the way of overhead.

Some of us have been asking around about fully paid, fully featured commercial products. No one really wants his or her name connected with these numbers. So here, totally unattributed, are some estimated development costs for different platforms.

Sega. The highest figure we received for a Sega CD title was $1.3 million per title. The company probably goes through many versions, kid-testing and the like. Certainly more of that is done by the big game companies than the other media concerns.

CD-I. The usual number given for a title has been in the $300,000 range but others say, “Oh no, it is more like $800,000.” This higher figure probably includes some overhead charges and authoring development costs as well as the actual costs of putting the title together.

CD-ROM. With some graphics, some video, some interactivity, $250,000 is “a number,” as they say. More text-based titles with simple animation and few search routines, which are quite common in this arena, may come in for around $100,000, but don’t hold your breath.

3DO. No developers have stepped forward yet with numbers. But John Perkins, who helped develop the Isis interleaving technology at Hasbro (where many 3DO folks came from), said it would take more than $300,000 to develop a good half-hour program for his interactive TV desktop system that Canadian cable operator Groupe Vidéoway is marketing for $300 or so. Other educated guesses are $500,000 or more, since Perkins’ Hasbro products cost more than a million to produce.

CDTV. No one talks much. But then, there’s not much to talk about.

Those are some big numbers for small sales. It is no wonder that many early producers are looking at interactive TV as a means of providing interesting programming at lower cost. More on that in a later issue.

PHILIPS JUST MIGHT HAVE A HIT WITH ‘NAME THAT TUNE’

Philips, which has been struggling for more than a year to establish its CD-I players into the home consumer market, has just announced its plans to release a Name That Tune CD-I title that offers instrumental, Muzak-like versions of 600 Top 40 hits from the fifties to present day, including such infamous one-hit wonders as “Billy Don’t Be a Hero.”

Name That Tune, of course, is based on the long-running TV game show, and is “hosted” by Bob Goen, also the latest host of the syndicated television game.

While we can’t imagine any family in the world actually wanting to play this game seriously, the title’s digital Muzak has potential cult appeal for the college crowd and the Baby Boomer generation that is in love with all things kitsch. It might even sell a few CD-I players.

Producer Rosalyn Bugg, who produced Jazz Giants for CD-I prior to Tune, believes in the mass appeal of the disc. “Tune does have a kitsch factor,” she says. “It’s not supposed to be a ‘Mario’ or ‘Sonic.’ What it is, is a social activity game.”

According to Bugg, a viewer can play Tune 15 times before a song repeats itself. And even when it comes up again, it might not appear in the same category. It also has more than 400 trivia questions, including “Which two Bee Gees are twins?” and “What is Paul McCartney’s brother’s name?”

Tune has Goen, the live-action host, walking around an on-screen room, inside a Parthenon-type structure with a black-and-white, checker-patterned floor. The lip-synch to audio is just a hair off, which only adds to the charm.

It took eight months to clear copyrights on all the songs for Tune. Bugg says it wasn’t difficult once she and Phil Cooper, head of royalties at PIMA, got in the door. “We went from music publisher to music publisher, making requests, doing demos,” she says. “Once we did a demo, people were very interested.” Bugg and Cooper did not demo Tune; they presented a sample of CD-I titles.

They then requested the publishers’ music catalogs to go through and select the music they wanted to appear in Tune. Bugg says this process took about three to four weeks and then the two would go back and resubmit the catalog with their requests. According to Bugg, Philips paid $125 for each 12- to 15-second clip of music. (This seems excessive to us, considering the tunes are Muzak and not performed by the original artists, but to each his own.)

Manifesto Music, based in Connecticut, actually produced all the music for Tune. Counting duplicates and remakes, the company produced more than 12,000 pieces of music.

Name That Tune is expected to be released in time for the Christmas season, with a retail price between $30 and $50. Bugg says her next project for CD-I is Wheel of Fortune.

CONTINUUM BEFRIENDS RUSSIAN MUSEUM & BARNES FOUNDATION

Continuum Productions Corp., formerly Interactive Home Systems (see Vol. 2, No. 6, p. 10), has established long-term working relationships with two of the world’s leading art institutions — The Barnes Foundation and the State Russian Museum.

It has acquired non-exclusive digital rights to both collections; digitized reproductions will be incorporated into Continuum’s interactive digital database and related interactive programs.

The Continuum database, developing in collaboration with leading arts institutions, photographers, publishers, videographers, information archives, artists and other cultural and educational resources, will eventually include collections of fine and applied arts, history, science, travel, current affairs and pop culture. It is intended to be a resource for students, educators, artists, scholars and the general public.

Both museums entered into the working agreements with Continuum for an opportunity to expose their collections to a larger audience. The State Russian Museum, located in St. Petersburg, contains the largest collection of Russian art in the world. Due to the vast size of the collection — about 400,000 paintings, sculptures, drawings, prints and works of decorative art — the museum shows only a sampling of its work at a time.

The Barnes Foundation in Merion Station, PA, holds one of the world’s finest collections of Post-Impressionist paintings and early French modern paintings and works on paper. Continuum’s non-exclusive rights include seminal works from Matisse, Cezanne, Renoir, Seurat, van Gogh, Gaugin and Picasso.

Continuum, located in Bellevue, WA, was founded in 1989 to explore the delivery of high-quality interactive programming to homes, schools, public institutions and businesses, and to provide image-based services to those in museums and creative communities.

Continuum also has two long-standing relationships with the Seattle Art Museum and The National Gallery of London and non-exclusive rights to several other important international art collections (see Vol. 2, No. 5, p. 20, and Vol. 1, No. 4, p. 18).

MCI TO TEST HIGH-SPEED, TRANS-ATLANTIC SERVICE

Beginning in April, MCI will begin a test run of a high-speed, circuit-switched, bandwidth-on-demand data service between the United States and Europe. MCI International Switchband, as the test service is called, will provide high-quality, contiguous bandwidth for such services as video conferencing, remote printing, imaging, local area network (LAN) connections, radio broadcasting and other high-speed data transfer applications.

The service is designed to offer MCI customers the ability to initiate a digital communications link for contiguous bandwidth that can support multiple data speeds from 256 Kbps up to 1,920 Kbps. A single call will provide a connection that allows flexible data transmission speeds throughout the call.

Test service will initially be provided to a handful of U.S. companies and the United Kingdom in conjunction with Mercury Communications, Ltd. Based on testing results, MCI may make the service available on a wide-scale basis in the U.S. and in additional countries in Europe and the Pacific later this year.

The service is compatible with the standards of European and Asian carriers in the Globand consortium. Globand is a group of European and Asian telecommunications carriers joined to provide a single standard for switched services. Undersea fiber will be the primary transmission medium.

MCI expects primary customers for the service will be transnational corporations, in particular those specializing in finance, engineering, medicine and publishing that have a need to transfer large amounts of data. Since no final decision has been made about whether the service will be offered commercially, no cost has yet been established.

FRANKLIN ELECTRONIC DICTIONARY APPROVED FOR MEDICAID REIMBURSEMENT

Slowly but surely, digital technology is being accepted into mainstream use. New York State has approved for Medicaid reimbursement Franklin Electronic Publishers’ electronic speaking dictionary as an augmentative communications device. Franklin’s Language Master Special Edition is a hand-held electronic language audio device for people who are blind, visually or hearing impaired, learning disabled or dyslexic.

Franklin, working with groups such as the American Federation for the Blind, designed Special Edition exclusively for its users. Among the features of the 5½-by-5-inch device are a specialized interface and customizable keys. Every letter is pronounced aloud as it is typed, and every word, definition and help message that appear on the screen. The keyboard contains raised high-contrast keys, several raised location dots for keyboard orientation, and “where” and “ID,” or identification, keys which verbally tell what function is being used.

In addition, speech speeds, font sizes and frequently executed commands can be adjusted and customized to accommodate the needs of each user. For example, up to 26 frequently used phrases, such as “I would like a glass of water,” can be stored to be spoken at any time.

The content of Special Edition is a comprehensive dictionary and thesaurus by Merriam-Webster that contains more than 300,000 definitions, 500,000 synonyms, spelling corrections for more than 110,000 words, and an electronic grammar book. The device, which became available in May 1992, retails for a suggested price of $500.

Although Special Edition is of benefit to its users, the $500 price tag is prohibitively high for many potential users. Reimbursement by New York State’s Medicaid program is a welcome step forward in making the technology available to a larger pool of people. New York is the first state to approve Franklin’s device for Medicaid reimbursement. However, Franklin is actively seeking similar sponsorship from other state and federal medical institutions across the nation.

APPLE REVEALS PARTNERS FOR NEWTON, DEBUTS POWERCD

Apple’s Personal Interactive Electronics division chose the CeBIT show in Hannover, Germany, last week to make several key announcements.

Apple previewed its PowerCD, the first of what Apple claims will be a line of CD-ROM-based multimedia products from PIE.

The portable device, which is a CD-ROM, Photo CD and audio CD player, is equipped with SCSI and video out rolled into one and can connect with either a computer or a television screen. It is expected to be shipped this summer. No price has been announced.

Regarding its Newton personal digital assistant technology, Apple revealed the names of four new companies that have agreed to develop and license products based on Apple’s Newton.

Joining Gaston Bastiaens, vice president and general manager for Apple PIE, were members from Sharp, Siemens Private Communications Systems Group, Cirrus Logic and Matsushita.

Sharp, Apple’s partner in the development and manufacture of the Newton PDA technology, announced that it plans to license the ARM chip technology, which is central to the Newton family architecture, from Apple.

Siemens Private Communications Systems Group outlined its strategy to collaborate with Apple on the development of NotePhone, a combination of Siemens-Rolm telephony and Newton technology that will provide access to telephone and fax features.

Cirrus Logic plans to develop and supply Newton compatible chip sets for use by licensees of the Newton operating system and for Apple itself in members of its planned Newton product family.

Matsushita rounded out the announcement with its agreement to license the Newton OS from Apple for use in future products. Both Apple and Matsushita made it clear that they are part of a mutual admiration society and are interested in potentially cross-licensing additional technologies from each other.

WHAT’S IN A NAME?
A network for media education

A national media education group called the National Alliance for Media Education (NAME) has opened up shop in Oakland, CA, with a $50,000 grant from the National Endowment for the Arts (NEA). Its charter is “to provide a way for people in the field to network, and to bring media education into the mainstream of education,” says Robin White, project coordinator.

During its first year, NAME will compile a media arts education database and publish a regional directory of organizations involved in the field. The directory will list media educators and organizations by region and by area of expertise.

The group will also produce public education materials that provide an overview of media education in the U.S. The education materials will contain descriptions of model media arts education programs, information about media arts and student-produced videos. Both the directory and the resource materials will be available to interested parties, White said.

Although the working group, functioning under the auspices of the National Alliance of Media Arts & Culture (NAMAC), is funded for a year’s term, NAME is planning for the future. Long-term objectives are to facilitate a national support network for teachers, to promote national awareness and understanding of media education, to develop a diversified funding base for media education, and to seek opportunities to integrate media education across the curriculum.

NAME is seeking involvement from artists, educators and others in the field of media education. For more information, contact Robin White,

c/o O.E.P., 84 Wooster St., Suite 503, New York, NY 10012; phone (212) 941-5944, fax (212) 941-5947.

ON COMMAND AT HILTON HOTELS

On Command Video, a specialist in on-demand video services and member of the First Cities alliance (see Vol. 2, No. 7, p. 11), has inked an agreement to provide Hilton Hotels with in-room interactive services and entertainment.

On Command will allow guests in Hilton’s 50 managed and owned hotels on-demand access via television sets to a variety of programming and interactive services, ranging from cable television and on-request pay-per-view to guest check-out, electronic messaging, room service and guest satisfaction surveys. Hilton’s franchise properties will have the option of using the system as their existing video contracts expire.

The On Command system relies on a bandwidth switch and sophisticated tracking software technology to transmit video and other services on demand.

The analog system works much like a telephone in which a “caller” is connected to video. Via television remote control, viewers may select a desired service from their TV screen. A request signal is transmitted along coaxial cable to an On Command site where a VCR or laserdisc is activated to begin playing the video. Guest check-out and electronic messaging services are similarly interactive.

Since coaxial cable is already installed in most U.S. hotels, an on-site switch and electronics are the only additional hardware that are needed to establish service. The switch and electronics are managed at each site location. On Command president and COO Bob Snyder claims the system could just as easily reside in a cable network, although no such setup is yet in service.

Founded in 1989, On Command has acquired extensive experience in on-demand video and interactive services and the backing of an impressive parent company. It is majority owned by Comsat Corp., the largest owner and user of the global Intelsat and Inmarsat communications satellite networks. Parent company Comsat Video Enterprises (CVE), a division of Comsat Corp., uses satellite and eight channels of bandwidth to deliver on-demand entertainment to the hospitality and entertainment industries.

Comsat is committed to exploring new opportunities in on-demand delivery services. Late last year, it joined the First Cities alliance to construct a ubiquitous nationwide network for the delivery of multimedia (see also Vol. 2, No. 7, p. 11). Charlie Lyons, president of CVE, sees the project as an opportunity to find the leading technology in pay-per-view delivery.

On Command estimates it will serve more than 120,000 rooms nationwide by the end of 1993.

THE VOYAGER CO. MOVES TO NEW YORK

The Voyager Co. of Santa Monica will soon be based in New York City. Long considered the seminal multimedia publishing company, Voyager decided not to renew its lease on its legendary beachfront office property and is moving most of its multimedia production facilities to the East Coast, where it will join company founders at Janus Films.

The publishing community in New York has consistently given Voyager a warm reception for its intelligent treatment of books in the electronic format. Voyager pioneered the Expanded Book series for the Apple PowerBook, providing another and unique outlet for many authors ranging from Neil Postman to Susan Faludi and Michael Crichton. Voyager co-founder Bob Stein is delighted at the turn of events. “In Los Angeles, we’re a pimple on the movie industry,” he says. “In New York, we’re heros.”

Stein says Voyager is starting to do quite well. “The CD-ROM market is actually starting to happen,” says Stein. “And we wanted all the partners to be together for the tactical, day-to-day stuff.” The company has already opened a new editorial office in Manhattan; Stein will move in June, and the rest of the company will move during the summer and into the fall.

The Criterion Collection, Voyager’s highly regarded laserdisc collection, is likely to remain in Los Angeles, and Stein says some of the multimedia development and marketing personnel may move to San Francisco. “To the extent that San Francisco will be the West Coast center for multimedia, we’ll put Voyager right in the key place.”

TRIMARK BEGINS INTERACTIVE DEVELOPMENT

Trimark Holdings, Inc., an independent film developer and distributor, is looking to cash in on its library of film properties with a new subsidiary called Trimark Interactive. The venture has its sights set on a growing interactive entertainment and video game market.

Heading the group are Kelly Flock, former acting general manager for LucasArts Entertainment Co. Consumer Software Division, and Trimark chairman Mark Amin. The venture is starting small — Flock is the first full-time employee — and plans to stay that way, adding no more than 20 employees within the year.

Flock, who has more than eight years’ experience in distribution, production and strategic marketing of consumer entertainment software under his belt, knows that technology companies are volatile and what is hot one minute can be old hat the next. “The industry is moving so quickly that no one can tell where it is going. You have to be ready to turn on a dime.”

For this reason, title development will be external. With title development outside the company, it won’t cast its fate with that of any one technology, but can develop for whatever technology is making money. The company will consider developing for any proven platform or technology.

“We’re not in business to evangelize a certain technology or platform,” says Flock. “We are running this as a business. This is not a sandbox. We are not a Microsoft able to afford millions in R&D. Our goal is to be self-funding soon.” Amin predicts the new venture could bring in as much as 25 percent of total sales for Trimark, which amount to $54 million annually.

Trimark has a dozen or more film properties in its library. However, not all of these films will become digital properties of Trimark. “When you start to get into film properties, you have to take it on a case-by-case basis,” says Flock. The company is seeking scripts and working with film crews to develop films that have interactive aspects.

The first products will be 16-bit video games for Nintendo and Sega on Trimark film properties such as Warlock and Leprechaun. The company plans to have three or four titles out by Christmas, according to Flock.

Trimark is anticipating the rollout of 3DO’s first titles. It won’t be a participant in the rollout, but as Flock says, “If it works, we will be very interested.” The company hasn’t ruled out developing for Philips’ CD-I either, although it has no immediate plans to do so.

After tackling the entertainment market, Trimark Interactive will look to the computer market, and then to the CD-ROM market. It is also considering potential future opportunities when interactive entertainment is available via cable, fiber optics or direct broadcast satellites.

CORRECTION: DEGRAF COLLABORATED WITH WAHRMAN

In last month’s Colossal goes interactive article (Vol. 2, No. 9, p. 14), we incorrectly stated that Brad deGraf was the sole creator of the first real-time performance of a computer-generated character and of the first theme park attraction to use computer animation. Both of these projects were actually created in collaboration with Michael Wahrman, who cofounded the now-defunct deGraf/Wahrman with deGraf.

Wahrman, a computer animation designer who is based in Los Angeles, is working on a virtual environment experiment with Ralph Winter, producer of Walt Disney’s upcoming feature Hocus Pocus, as well as consulting on digital production and entertainment for IBM Research. We regret the error.