SPRING HAS SPRUNG
Everybody who’s anybody makes a deal in April and May

Sometime between mid-April and today, many of the most important and influential companies in the digital world started courting —almost promiscuously — everyone from AT&T to News Corp., Sony to IBM to Dow Jones got into the act. (See IBM-Time Warner story, p. 3, for the quintessential example.)

Talk is cheap, but even the talk these days is fascinating.

YOU WANTED INTERACTIVE? YOU GOT IT
Sony and United Video launch all-games channel

In anticipation of the hundreds of empty cable channels that will need filling as a result of all this spiffy digital compression technology oozing out of research labs, and ready to make use of interactive television technology, Sony Pictures Entertainment and the United Video Satellite Group have announced an all-game- show channel.

Not a lot is public about the venture, but the two firms are planning to launch the channel in 1993. Sony owns more game shows than any other studio or network and is obviously enamored of the idea of creating a new revenue stream from the 10,000 very old episodes of “Wheel of Fortune,” “Jeopardy” and others.

Using the 900 network. The Family Channel made a similar announcement (both came at the NCTA conference). The Game Channel would be launched in January 1993, and would use 900-number telephone service as the return mechanism, at least initially. Both proposed channels would be basic cable services, supported by advertisers. Both would also create new games specifically designed for home interactivity.

And while discussing channels, let us not forget that USA Network has just announced a 24-hour science-fiction cable channel. Sci-Fi (also known as SF) fanatics are completely devoted to their hobby. (Note the 50,000-strong membership of the Star Trek Fan Club.) As one executive said (sic), “There’s a 24-hour news channel. There’s a 24-hour music channel. We figured the time was right for 24 hours of sci-fi programming a day.” USA executives didn’t say so at the time, but the Sci-Fi Channel sure looks like a natural for interactive capability.

AT&T DEVELOPS PAY-PER-VIEW, VIDEO-ON-DEMAND TECHNOLOGIES
Telephone giant may have inside track as major supplier to cable industry

At this month’s National Cable Television Association (NCTA) conference held in Dallas, TX, AT&T announced it has developed a technology that will allow cable customers to order and receive movies on demand.

Along with partners in cable and satellite transmission, AT&T has taken some of the signal-compression work it has done on HDTV (with Zenith Electronics as its partner, it is one of the entrants in the competition for a national digital HD transmission standard) and has transferred it to the cable industry.

AT&T would provide more than compression technology, which it says can compress up to 13 digital video data streams into a single video channel. It would also build the transmission gear for cable and satellite operators, as well as TV set top boxes for the consumer.

Ducks in a row. In researching and testing this technology, AT&T says, it is working with U.S. West, one of the nation’s seven regional Bell Operating Companies (RBOC); the country’s largest cable operator, TCI (aka Tele-Communications Inc.), satellite company Comstream, and News DataCom, a subsidiary of Rupert Murdoch’s vast News Corp.

The key phrase in news reports about this compression technology was that it could deliver a “near normal” picture after editing out more than 96 percent of the information. Let’s hope by the time AT&T delivers the technology, the picture will be better than “near normal.” As we all know, consumers will not spend more money to buy substandard image quality. Thirteen more crummy-looking channels aren’t exactly incentive for spending extra money.

Deploying fiber. AT&T will conduct two service trials this summer. With U.S. West, it will test a dial-up video service, and with TCI, a pay-per-view service. Both dial-up and pay-per-view are expected by many to be the impetus for widespread installation of fiber-optic broadband networks during the next decade.

As a result of AT&T’s announcements at NCTA, insiders say that AT&T has an inside track to be one of the major technology suppliers to the cable industry.

THE TIMES THEY ARE A-CHANGIN’
Bitter enemies team up to explore new possibilities 

If you read a not-too-distant issue of Digital Media, where Cathleen Black of the American Newspaper Publishers Association (ANPA) was railing against the Bell Operating Companies entering the information services business, the following news probably shocked you.

BellSouth, one of the seven Baby Bells, teamed up with publishing giant Dow Jones in one of the decade’s best “strange bedfellows” stories (almost as good as Apple and IBM) to explore and implement new information services opportunities.

Live updates for cellular. The first fruits of this partnership are now available in Los Angeles, as the Personal Info Clips service, which is available to subscribers of BellSouth’s subsidiary, LA Cellular. LA Cellular customers can choose to receive live updates about ten out of 130 categories of information, from news to sports to ski conditions. Updated information is automatically deposited in the subscriber’s voice mailbox.

Tim Klein, a BellSouth spokesman, said that the service is not limited to cellular service, but can operate over land lines as well. In addition, the service will eventually be able to offer text, fax and even multimedia information.

Vocal opposition. Dow Jones has long been a provider of news through electronic means, but it is also a newspaper publisher. The ANPA has been extremely vocal about its opposition to the telephone companies’ entry into information services (see Digital Media, Vol. 1, No. 7, p. 9, for Black’s statement).

BellSouth began testing this service in Los Angeles, instead of its native Georgia or the other southern states it serves. By staying out of its regulated service area, BellSouth may have calmed, at least temporarily, some of the ANPA’s fear of unfair competition for local advertising dollars.

THE PRIMORDIAL OOZE

It would appear that there are two distinct phenomena occurring in the transition to a digital world. First, the corporations considered unbeatable in their home industries, are realizing that they cannot compete alone in the broader arena. Even within many of these industries, things are so topsy-turvy that mergers and alliances continue to dominate the news.

The second is far more interesting: Much of the research and development that these companies have been doing for years is now becoming ready for market. This became clear when John Sculley showed Apple’s “Knowledge Navigator” video at the winter Consumer Electronics Show in January, announcing Apple’s entry into the “personal electronics” business.

Although everyone who’d seen “Knowledge Navigator” a million times groaned, it suddenly became clear that the technology, which seemed light years away when the video was first shown in 1987, was almost ready for prime time. Everything from voice and handwriting recognition to digital video and wireless communications is operational and edging to the starting gate.

Still testing. Though some are still a little too rickety to be built into products, all of the technologies demonstrated in the “Knowledge Navigator” are working prototypes being tested in Apple’s Advanced Technology labs. In the same way, IBM and AT&T are now ready to take compression technology that’s been buried in research labs and develop it into real products.

The rate of change isn’t likely to slow much, if any. Corporations that rule the land today are trying mightily to be solid players in markets that are still largely enigmatic to them. By the end of the decade, the picture may have shifted entirely to a completely new group of players.

But it’s crystal clear, based on the quality and level of collaboration announced in the past month between some of the U.S.’s largest corporations, that the stakes are high and they all hope to be evolutionary winners in what’s still the primordial ooze of digital ubiquity.

David Baron, Denise Caruso