Warner reveals tie-in with interactive TV

In a surprise move only one month after nearly a dozen staff members were laid off and days after a major presentation at the CD-ROM Expo in Boston, Warner New Media’s president and CEO, Stan Cornyn, announced his retirement from the Time Warner subsidiary. Terry Hershey, director of corporate development and technology for Time Warner, has taken over the helm.

Many believe that the changing of the guard signals a more direct move toward interactive television at the Time Warner subsidiary, a move that makes sense considering its 150-channel Quantum cable system in Queens, NY. In fact, during remarks at the Boston Expo, Cornyn made the first public comments about how Time Warner might exploit its cable connections to help sell more interactive discs.

HERSHEY TAKES A DIFFERENT CUT

Hershey, who will retain her position at Time Warner’s corporate office in addition to the presidency of Warner New Media, says that the CD-ROM focus is too narrow anyhow.

“We aren’t in the CD-ROM business and we aren’t in the cable business and we aren’t in the floppy disk business,” Hershey says. “What we’re in is the interactive multimedia business, and that may take a variety of forms — electronic delivery as well as physical forms. From Time Warner’s point of view, which says we have all kinds of content from information to entertainment here, what we want to do is look at all the alternatives for delivery.”

She recalls the movie business, when videotapes were pegged as the death knell for the movie theater business. “But in fact, they just added to it,” she says. “Every time a new medium is developed, it increases the opportunity for delivery of our products. Choosing one or the other isn’t the relevant question. The question is, We’ve got it, what’s the best way to deliver it?”

Hershey says the future of Warner New Media is solid, and that rumors of the company’s imminent demise are untrue, but declined to comment further on future directions. “This absolutely is not the end for Warner New Media,” she said. “But our philosophy is not to talk until we have something to say.”

INTERACTIVE FOR TV NOTHING NEW

During his tenure at Warner New Media, Cornyn often talked about interactive multimedia for television. At the first Digital World conference in 1990, he demonstrated a prototype called The Whole Megillah, an interactive system that he claimed could be implemented either in the CD-ROM/player format or broadcast over cable.

However, insiders say very little work was actually done on interactive TV systems in Warner New Media because, as one said, Cornyn didn’t like the way CD-ROM titles looked on a TV screen.

Walt Klappert, head of technology for Warner New Media, says interactive TV designs will “definitely be part of what’s on our plate, more so than in the past.” Though he says interactive TV could be an exciting application area, he doesn’t believe that it will be a substitute for optical disc technology.

Flipping a popular notion. In fact, Klappert echoed Cornyn’s remarks at the Boston Expo. This newly articulated Warner New Media strategy flips by 180 degrees the popular notion that CD-ROM products will prepare the public for interactive TV.

“Until really the mass market consumer has a chance to see why they want interactive multimedia, they aren’t going to buy it. [Interactive TV] could be to CD-ROM what radio is to the record industry. Cable will be an opportunity for people to experience interactive multimedia, but if they want to collect it and guarantee that they’ll have it for all time, I think they’ll go to the equivalent of a record store and buy it [and] put it on their shelf,” says Klappert.

But he is not talking about today’s CD-ROM technology, which has certainly proven to be less than thrilling in terms of performance. “I’m thinking, for example, of double-speed, quadruple-density CD-ROMs,” he says. “Then you’re starting to get bandwidth that will give you pretty good quality video and since it can hold two hours of video it can be a movie carrier. This would be quite good for multimedia too.”

TITLES HAVE TO BE MORE ATHLETIC

Of course, for this to happen interactive titles will have to be far more athletic than they are today. Not many CD-ROMs inspire the kind of constant reuse — or at least potential for reuse — that defines the commerce of music or literature, and that is the challenge. In fact, this was a point that Cornyn himself made rather strenuously at the recent CD-ROM Expo in Boston.

Cornyn demonstrated the company’s latest interactive TV project with Time, and said that with two-way fiber optic cable (à la the Queens project), what he called “Interactive, Fast-Forward TV” would allow viewers to skip through TV shows as quickly as they do a magazine. Home copies would be as easy as pushing the “buy” button on the remote.

He claimed there is a legitimate reason for both markets. “We may simply have developed them in the wrong sequence,” he said during his talk. “I know we in CD-ROM are trying to make movies, but it feels like we’re trying to make them out of flip books, when videotape and celluloid are available. We know people will buy our multimedia discs, once people are aware of our virtues. CD-ROM needs that kind of exposure.”

THE FUTURE’S BROAD HORIZON

By all accounts Time Warner is paying close attention to virtually everything that’s going on in multimedia, but continues to play its cards close to the chest. No one is quite sure how the rumored deal with IBM for a digital production system is going, nor do we know exactly what the company has planned for its Quantum 150-channel cable system in New York.

But one thing is certain: Terry Hershey will be at the center of whatever action comes down the pike. If indeed she is serious about Cornyn’s departure as “absolutely” not the end of the line for Warner New Media, then it’s probably safe to assume that the company’s multimedia focus is about to get a lot wider.

Denise Caruso