• TELECOM INDUSTRIES IN TURMOIL
In his presentation at this year’s Digital World, Alfred Sikes, former chairman of the FCC and now head of the new media and technology group within the Hearst Corp., predicted that an on-rush of technological and business developments in telecommunications in the U.S. would soon overwhelm the ability of federal regulators and lawmakers to keep up.
Less than two months later, it is clear that his prediction is coming true. A series of events in the month of August makes it all but certain that local monopolies in telephone and cable service will be broken, and only slightly less certain that from here on out communications policy will rely a lot more on competition and a lot less on service and price regulation.
• NEW MEDIA IN HIGHER EDUCATION
America has long been in love with the infinite possibilities afforded to us by new technologies. But too often we create the technologies and ask important questions later.
For those concerned with the social as well as technological aspects of new media, the educational system may offer refuge. Dangling the carrot of no product deadlines and no particular corporate religion — mixed with a strong dose of intellectual dialog on the effects of new media — some of the most prestigious learning institutions in the country are offering master’s and doctoral-level programs specifically focused on interactive telecommunications, multimedia applications, digital video and interactive television, and human interface design.
• TODD RUNDGREN-INTERACTIVE
Composer, musician and computer hack Todd Rundgren has done something that’s never been done before: he has created an entirely modular musical program based on original music. The goal of his new title, TR-I: No World Order, is to expand the way we perceive and enjoy music — no small feat, even for Rundgren, who in his 20-year music career has constantly tried to broaden and redefine what a musical experience is.
• I/O
Should we form a “Corporation for Public Cybercasting”?
• CHANNELS
New media publishers adopt entertainment industry model.
• CHANGES AT FIRST CITIES
Growing pains or the death knell for multimedia industry consortium?
• THE STATE OF THE INTERNET
News and views from INET ‘93 and Interop conferences.
• MEDIA GIANTS RESTRUCTURE
Multimedia development moves out of the backroom and into the boardroom.
• PUTNAM NEW MEDIA DEBUT
MCA division debuts first title.
• BRIEFS
News Corp. buys Delphi Internet Services; Nintendo and SGI work on Project Reality; Digital VCRs; Video CD; Interactive Network expands nationwide; Discovery tests Your Choice TV; Nautilus tops 10,000 subscribers; Sigma’s MPEG decoder board; Vyvx signs local access agreements; Premiere 1.0 for Windows.
• EVENTS
The Western Show.
>FOCUS
TELECOM INDUSTRIES IN TURMOIL
The end of the local phone and cable monopolies
In his presentation at this year’s Digital World (see Vol. 3, No. 3, p. 19), Alfred Sikes, former chairman of the FCC and now head of the new media and technology group within the Hearst Corp., predicted that an on-rush of technical and business developments in telecommunications in the United States would soon overwhelm the ability of federal regulators and lawmakers to keep up. In short, events, not policy-makers, will be in the saddle.
Less than two months later, it is clear that his prediction is coming true. A series of events in the month of August makes it all but certain that local monopolies in telephone and cable service in the U.S. will be broken, and only slightly less certain that from here on out communications policy will rely a lot more on competition and a lot less on service and price regulation.
Radical changes, such as those proposed by Ameritech and Rochester Telephone to open up local phone service to competition (which most people considered unlikely a month or two ago), now appear to be both rational and very likely to happen. (For more on the Ameritech proposal, see Vol. 3, No. 2, p. 9.)
THE MONTH CABLE OPERATORS, TELCOS WILL NEVER FORGET
Even though it was August, a month when typically work slows down, people take vacations without their cellular phones and the Friday workday tends to end between 2 and 3 PM, it seems that the people who control the telecommunication industry were working as if they were preparing for a long, cold winter. Similar to last December, when Bell Atlantic, Viacom, Tele-Communications, Inc., and PBS all made major announcements within weeks of each other (see Vol. 2, No. 7, p. 19), there was so much activity during the month of August that people were getting whiplash just reading the morning papers.
Fractiousness aside, some very basic assumptions in the business of telecommunications began to crumble as the technology — and the courts — surpassed the law once again. The truly amazing part is that this is becoming commonplace; the advances in telecommunications technology are stripping down the legal and regulatory structures that were designed to keep individual industries in line.
The sanctioned monopolies of the cable industry and the local phone companies have come into question; the turf wars between local and long-distance phone carriers have heated up; television and computer networks are now interconnecting. (Indeed, this phenomenon is not even endemic to this country: European telecommunications policies and practices are also up for grabs, as new competitors enter the fray without the baggage of established behemoths.)
THE WHOLE IS GREATER THAN THE SUM OF ITS PARTS
To understand better where we are heading, it is important that we look at the events of the past month, not as singular announcements but as part of a whole.
AT&T/McCaw. Last fall, AT&T and McCaw Cellular had agreed in principle to a complex deal in which AT&T would acquire a minority interest in McCaw and the two companies would develop joint products and services. Speaking at Digital World in June, McCaw chairman Craig McCaw indicated that the deal was still a long way from completion. In August, McCaw and AT&T chairman Robert Allen decided that trying to work out the ins and outs of a cooperative venture was too complex. The only sensible way to complete the deal was to have AT&T buy all of McCaw.
Under the terms of the acquisition, AT&T would swap $12.6 billion of AT&T stock for the stock in McCaw and would assume McCaw’s $4.9 billion debt. This makes the total value of the transaction roughly $17.5 billion — about 10 times McCaw’s annual sales of $1.74 billion! Craig McCaw himself will get 16.7 million shares of AT&T stock (worth just over $1 billion at current prices), and the four McCaw brothers as a group become the largest shareholder in AT&T, with a total of more than 45 million shares.
What AT&T gets. Why would AT&T pay so much? Because, if approved, this deal will make AT&T the largest cellular operator in the U.S., give it a base to expand into additional cellular markets, digital cellular CDPD (cellular digital packet data) services and celluar PCS (personal communication services). Equally important, it will also give AT&T the expertise to offer cellular services to new markets outside the U.S., where it will probably prove less expensive to install wireless phone networks than to string all the cable required for wired systems.
What particularly galls the regional phone companies is that this move puts AT&T back into the local phone business, able to connect its cellular customers directly to its long-distance services without the need to pay 45 cents of every dollar in local access charges — and without the “universal service” obligation to serve money-losing, low-volume customers.
Naturally the regional phone companies are crying foul. If AT&T is allowed back into the local phone market, they argue, they should be allowed to compete in the lucrative long-distance market.
Getting approval. This is not a done deal. James Quello, the interim FCC chairman has already mused that the deal could be anti-competitive or even monopolistic. Things could come unglued if the Justice Department or the FCC (or both) decided to oppose it.
You can bet that there is going to be some serious lobbying on the part of everyone who might be affected. You can also bet that this deal will give the regional Bell operating companies (RBOCs) — which have been devoting increasing amounts of attention to competing with each other — incentive to cooperate in order to compete with their erstwhile parent. Shortly after the initial AT&T/McCaw announcement last fall, GTE announced formation of a nationwide “MobilLink” cellular consortium. All of the RBOCs except for Southwestern Bell have since joined the group.
CABLEVISION CONNECTS SUBSCRIBERS TO THE INTERNET
On August 24, Continental Cablevision, the third largest cable operator in the U.S., announced that it will be offering cable access to high-speed data networks, including the Internet. (For more on the state of the Internet, see p. 18.)
The service, which is expected to start in January in selected Massachusetts communities, will include high-speed access to the Internet, access to local services that provide such information as bus schedules and school lunch schedules, and some interactive services (such as program listings). It will be expensive ($70 to $100 per month), so it is likely to appeal to people and organizations that want to move large amounts of data rather than casual users.
If Continental expands this service to other cities, it could open up some interesting possibilities for people who would like to be able to send large amounts of data from one point to another. Since there is no charge for sending data over the Internet, a $70-per-month coax connection to the Internet could end up being a hell of a deal.
The arrangement could also raise the status of the Internet as the existing de facto high-speed digital highway for distribution of increasing amounts of commercial information and entertainment products. (For more on commercial services on the Internet, see News Corp. buys Delphi, p. 27.)
BELL ATLANTIC WINS RIGHT TO ENTER CABLE BUSINESS
On the same day of the Continental Cablevision announcement, federal district judge T.S. Ellis ruled that the legal provision that prevents local phone companies from offering cable service in their home service areas is unconstitutional on the grounds that it abridges the First Amendment right to free speech.
Until now, forays by RBOCs into cable and video services have been outside their own territories, as required by the 1984 Cable Act, which prohibits phone companies from running cable TV operations in the areas where they offer phone service. So most of the RBOCs, in an effort to learn the cable business, invested in other systems: US West bought 25 percent of Time Warner Entertainment, and is one of the largest cable operators in the United Kingdom. Southwestern Bell bought two cable systems in suburban Washington, DC, which is Bell Atlantic territory (see Vol. 2, No. 10/11, p. 32), and Bell Atlantic plans to roll out CellularVision service in New York, which is Nynex territory.
The suit was filed by Bell Atlantic Video Services and Chesapeake and Potomac Telephone Companies of Virginia (both Bell Atlantic subsidiaries) to win the right to start cable service in Alexandria, VA. If the ruling is upheld, Bell Atlantic can operate both cable and phone service in the same service area. If it chooses to do so by acquiring an existing franchise (rather than starting a new competitive one), the effect of this ruling could be to nip in the bud local competition between cable and phone companies.
If the ruling stands, it would enable telephone companies to compete with cable companies for local monopolies. The telcos, however, would be able to offer both video and voice services (as US West already does in the UK) over parallel systems or, eventually, over a single, integrated network.
There are some significant anti-trust issues here as well: Can the phone companies be trusted not to use the information they have about customer calling habits (including shopping, 800 and 900 number usage, etc.) to engage in unfair marketing practices, as has already happened.
On the upside, the threat of telco entry into the cable market, especially after the RBOCs were able to demonstrate video dial tone, has spurred the cable television industry to move extremely rapidly to develop digital technologies and new services. The threat of competition from outside the industry has also added to the sense of urgency for cable reform, especially in the area of customer service (more on this later).
Judge Ellis’s decision will undoubtedly be appealed, but it may prove difficult to overturn. While the decision applies only to Bell Atlantic, it provides a precedent for the other Bell operating companies, and opens up the question about whether the cable companies should be able to offer telephone services. (The cable industry is still far from this level of sophistication.) The ruling throws a big wrench into the works of separate regulatory policies for the cable and telephony businesses — a policy environment that the federal government is going to have to address soon.
Bell Atlantic and CellularVision. Bell Atlantic is not about to wait on this decision, however, before it gets into the video-on-demand game. In fact, it has been one of the most aggressive of the RBOCs in looking for new technologies and market opportunities to provide video services.
On August 4, three weeks before Judge Ellis’s decision, Bell Atlantic and CellularVision of New York announced a partnership for a New York area rollout of “wireless cable” using CellularVision’s patented technology.
The CellularVision system uses a very high radio frequency (27.5 to 29.5 GHz) previously reserved for point-to-point commercial communication, and now being opened up by the FCC for other uses. As with a cellular telephone system, the service area is divided into multiple cells, each is serviced by its own transmitter. Each transmitter covers an area approximately six miles in diameter.
The receiving antenna is a flat five-inch plate that can be attached to a window. It feeds a coax cable that runs to the settop decoder box.
Initially, the system will be essentially a 49-channel, wireless cable system. Each cell uses 1 GHz of the available bandwidth, divided into 49 20-MHz video channels. CellularVision says that it expects to double this to 98 channels by broadcasting two signals with reverse polarity over the same channel. Reverse polarity is a process by which two signal waves are sent with opposite electrical impulses, allowing both signals to travel down a single channel. These are analog signals.
CellularVision claims that its system delivers higher-quality signals than wired cable, and at lower cost. It claims that broadcasting FM signals in a relatively interference-free part of the radio spectrum produces distinctly better pictures than does analog cable. And, since you do not need to run wire down every street to every subscriber’s home, the system is significantly cheaper to build.
By using phone lines or the reverse-polarity channels for “back-links” from the home to the service provider, CellularVision can be extended to provide interactive services. Although neither Bell Atlantic nor CellularVision is saying so, we presume that, like a wired cable system, the system could also be used to send compressed digital video — which would significantly increase the number of channels available and make the system a more direct competitor to the next generation of fiber/coax digital cable systems.
An end-run around cable. In 1991, CellularVision received an FCC license to install the system in the New York area. Bell Atlantic, which has now taken a minority interest in CellularVision, will deploy and operate the CellularVision system in the five boroughs of New York City, plus the adjacent Westchester, Rockland and Putnam counties — a service area with a population of 8.5 million.
If this initial rollout is successful — and if they can obtain rights to the necessary radio frequencies — the partners will install the system in additional cities and/or license the technology to other operators for use in other areas.
In some ways, the wireless cable initiative is an end-run around the traditional cable operators. In the same way that satellite operators can provide services in an area covered by a local cable company, the wireless system can become another option for the consumer, and another form of competition for consumer home entertainment dollars and loyalty. All they have to do is stop calling it “wireless cable,” a ridiculous term if we’ve ever heard one!
Expertise in video dial tone. In addition to its proposed trial with CellularVision, Bell Atlantic has also teamed up with Future Vision of America Corp. and Sammons Communications — in two separate trials in the New Jersey area — to test the feasibility of delivering both telephone and video services into the home using a combination of optical fibers and coaxial cables.
If the CellularVision, Future Vision or Sammons tests are any indication, Bell Atlantic will be trying to move into the cable market in its home turf as soon as possible. The company is bringing expertise in a number of areas that the cable television people are just beginning to learn about. So whether Bell Atlantic buys an existing cable system, or implements its own technology for the delivery of video, the local cable operators in this particular RBOC’s region have reason to panic.
THE CABLE ACT AND RE-REGULATION BLUES
In the absence of an open competitive environment, Congress last year passed a bill re-regulating the cable industry. On September 1, cable customers got their first taste of what it will mean for them. We doubt that they were impressed.
The FCC decided that the changes in cable pricing and services should be “revenue neutral.” That is, even though it was complaints about high rates (and poor service) that brought about re-regulation, rates are not being rolled back. Instead, rates are being reconfigured. What most consumers saw was a confusing shuffling of channels and a monthly bill that is probably little changed. (The local operator in Malibu, CA, moved a third of the channels around with no prior notification and raised basic rates to compensate for the fact that it can no longer over-charge for settop boxes and remote controls.)
We doubt that this experience is going to increase consumer trust in either cable operators or government regulators. Our guess is that it will make increased competition, such as those we’ve mentioned, a better alternative than regulation.
CAN WE KEEP COMPETITION ALIVE AS TELECOM INDUSTRIES MERGE?
What a glorious mess! It is difficult to see how any of this ever gets put back in the box. It is clear that the legislators (most of whom clearly do not understand this stuff) and regulators (some of whom understand it) are going to have to play catch-up to lay out the new playing fields.
What should we do? The Ameritech proposal (as well as a similar proposal made by Rochester Telephone) to open up local phone service probably has a lot more appeal than it did a month ago. In simplest terms, Ameritech is offering to give up its monopoly in local phone service in exchange for permission to enter markets it was kept out of by Judge Greene: long-distance service, video and telecom equipment manufacturing, in competition with AT&T, MCI et al. Following the AT&T/McCaw deal, we would imagine that other regional phone carriers are beginning to think that this would be a pretty good idea.
But the Ameritech/Rochester Tel proposal does not go far enough. We have been saying for several years that it is imperative that we begin treating telecommunications as a single market rather than as separate markets. The Bell Atlantic decision pretty well mixes telco and cable together. (If phone companies have a constitutional right to carry video, then don’t cable companies have an equal right to provide phone services?) The trick now is going to be insuring that we really do get competition by ensuring that there are multiple service providers for the full spectrum of telecommunication services in all service areas.
There is a lot of good news out of what happened this past month, but there is also some troubling news. On the positive side, virtually every one of these developments should increase competition for both telephone and cable services. On the negative side, Judge Ellis’s ruling in the Bell Atlantic case could lead to a situation in which a single company is providing wired telephone, cable and even wireless service in the same service area. This would be a terrible outcome!
The lesson is simple: Competition works, whether for local or long-distance phone service or the delivery of video and other entertainment to the home. The primary focus of public policy should be ensuring that we do, indeed, get open competition on a level playing field. While all sides will posture about when such a situation can be realized, the pace of change — in the month of August alone — shows that all of the parties are up to the challenge.
Jonathan Seybold
IF YOU TOOK A VACATION IN AUGUST
August was a busy month for the cable operators and telcos. In chronological order, here’s a quick snapshot of some of the highlights of the month:
• August 4: Bell Atlantic shattered the conventional wisdom that wires will be used for video and wireless communications for voice with the announcement of a joint venture to deliver wireless cellular television services that will compete directly with coax cable services.
• August 16: AT&T and McCaw Cellular announced that, rather than buying a minority interest in McCaw as previously announced, AT&T intends to acquire the entire company. If approved, the $17 billion deal will be the second largest corporate acquisition in history and will transform the telephone business in the U.S. and around the world.
• August 24: As a result of a lawsuit filed by Bell Atlantic, a federal judge ruled that the prohibition that prevents the phone companies from offering video services is unconstitutional. If this ruling stands (and we believe that it will), it opens up the floodgates for telephone companies to compete directly with cable companies.
• August 24: Continental Cablevision announced that it will offer its subscribers (expensive) connection to the Internet.
• Also in late August: More and more information about AT&T’s ambitious plans began to filter out including:
– Extraordinarily high-speed lasers (that will dramatically increase the data rates over fiber-optic trunks).
– Ties to the Viacom and Time Warner interactive cable test sites.
– A series of initiatives in the cellular, PCS (wireless personal communication services) and CDPD (cellular transmission of digital data) arenas that will help to leverage the McCaw deal.
– New investments in the hand-held wireless digital assistant and interactive game markets.
• September 1: The first implementation of re-regulation of cable TV rates and services took effect Sept. 1. The net effect of a law inspired by consumer revolt over rising cable rates: rates did not go down. For most users, the great push for re-regulation of cable rates and services yielded no tangible benefit.
The combined effect of these events is almost certainly fatal to the established division of “turf” between phone companies, cable companies and cellular providers, and between local and long-distance services.
Jonathan Seybold
BEYOND THE TOOLS TREADMILL
Multimedia curricula enters higher education
America has long been in love with the infinite possibilities afforded to us by new technologies. We love to hear how some day our TVs will be interactive, our newspapers electronic, and our refrigerators “smart” enough to order the groceries. But will we still be enamored of these technologies if indeed they become tomorrow’s reality?
Too often we create the technologies first and ask the important questions later. The corporate world isn’t a likely place to find social criticism as part of the development process, because most companies that wish to remain viable today cannot afford to engage in that kind of long-term deep-think. In the business of making products that make money, they’re now finding themselves competing not only within their own industry but with powerful outsiders as well, as the digital convergence continues to gain steam.
For those concerned with the social as well as the technological aspects of new media, the educational system may offer refuge. Dangling the carrot of no product deadlines and no particular corporate religion — mixed with a strong dose of intellectual dialog on the effects of new media — some of the most prestigious learning institutions in the country are offering master’s and doctoral-level programs specifically focused on interactive telecommunications, multimedia applications, digital video and interactive television, and human interface design.
What these universities offer is an opportunity to engage in constructive play, where the curious are encouraged to experiment and implement their visions of the future for a critical audience.
THE EAST COAST TRIUMVIRATE
Although the West Coast is a technology haven for many of the converging industries, it is the East Coast that provides the most established learning programs in these new forms of communications. Renowned institutions, including New York University, Harvard and the Massachusetts Institute of Technology, offer advanced degrees in new media technologies and interactive telecommunications.
While there are many other excellent degree-granting technology programs throughout the United States today, these three are most representative of the different teaching philosophies and cultures within the technology-and-education community.
Each university’s curriculum takes a different cut at the technology itself, concentrating in varying degrees on production, design, content or research. But all have one thing in common: a desire to see students go beyond their love affair with the technology itself, so that they can better focus on its potential merit to society.
Hands-on production at NYU. One of the oldest programs to concentrate on multimedia applications is the Interactive Telecommunications Program at NYU, which was established in 1979, in part under the guidance of Red Burns, one of the founding directors of the Alternate Media Center and the chair of ITP since 1983.
Notably the school shares residence with NYU’s well-regarded film school in the Tisch School of the Arts, which, Burns emphasizes, is important because “we are primarily interested in digital technologies as creative tools.”
The basic philosophy of the two-year program is “understanding craft and content,” according to Burns, who began her career as a documentary filmmaker in the early days of the Film Board of Canada. The school reflects her early interest in independent film work, offering students at the university as well as people in the outside community many opportunities to experiment with interactive television.
Jumping right into it. The Electronic Neighborhood project, for instance, is an interactive cable television program that is a multimedia bulletin board. It is interactive in two ways: Viewers at home with touchtone phones can call a number at NYU and actually control the TV show from their home, navigating through images stored in a video server, for instance, by pressing certain buttons on the phone. At this point, only one home viewer at a time can control the show via the phone, while other viewers watch. Anyone, anywhere, however, can send information into the Electronic Neighborhood virtual environment by fax, modem or network. The experiment tests interface design, interactivity and interoperability issues among computers, cable television and telephone networks.
Encouraged to fail. Obviously, the school takes a hands-on approach to studying interactive media. Students enrolled in the program spend a lot of time actually producing, working with hardware and software to build new media titles and interactive art installations. Currently an installation designed by students Sharleen Smith and Mark Avnet is on view at the Cooper Hewitt Museum as part of their Mechanical Brides exhibit.
Unlike what often happens in the corporate environment, students are “encouraged to fail” as they explore what is possible with the emerging technologies, according to Burns. Most of the students walk away from the program with a final product or thesis, an interactive media demo that they can present to prospective employers. As one former student says, “This is the place where multimedia wannabes find out if they have the right stuff.”
NOT JUST PRODUCTS, BUT CONNECTIONS RESULT
Students not only leave with a product under their arm, but also with some fairly powerful industry connections. In addition to Burns, the faculty of ITP includes, among others, Pat O’Hara, the associate director of the Alternate Media Center and senior production faculty; John Thompson, credited with writing and designing Lingo, the scripting language for MacroMind Director; Kenny Miller, who is working on new interactive technology applications at MTV; Jeff Jones, who is currently electronic media coordinator at the American Museum of Natural History; Stacy Horn, founder of Echo, an electronic bulletin board service; and Daniel O’Sullivan, who is considered the pioneer of navigable movies on the Macintosh.
O’Sullivan created the interactive public access program called Dan’s Apartment, which is shown on cable TV and was lionized in the pages of the New Yorker a couple of years back. His work in this field spurred Apple to create several navigable video prototypes, including one that tours the Golden Gate Bridge and another in which the viewer can walk through a Russian palace. Many industry leaders such as Michael Mills of Apple’s Advanced Technology Group are affiliated with the program as well, and have taught at the school.
Good internships. In addition to forging relationships on campus, the school offers a strong internship program, often placing students at such companies as Apple, MTV the Nynex Media Lab, Microsoft and The Voyager Company during summer break.
“My career absolutely advanced because of attending NYU,” says Abbe Don, an interactive installation artist who is now working at Kaleida Labs. “I got a level of hands-on training that I couldn’t find elsewhere. I got to play around with different interfaces, different computers. I created my own laserdisc.” Based on Don’s work at NYU, she received an internship in Apple’s Human Interface Group, where she began working on the Guides project, a research project that explored the usefulness of human-like characters or “agents” in interactive media.
She then went back to NYU and produced her thesis, an interactive laserdisc, which was the prototype for “We Make Memories,” a media installation that became Don’s entrée into the field. After graduating she became an independent consultant to such companies as Apple and Paramount.
HARVARD CONCENTRATES ON INTERACTION BETWEEN TECHNOLOGY AND EDUCATION
While NYU focuses on design and production work, Harvard’s Technology In Education (TIE) program takes a more theoretical approach, concentrating on the interaction between the two disciplines.
The one-year program, offered within the department of Human Development within the Graduate School of Education, offers students a range of courses designed to provide both a solid theoretical foundation and practical experience in areas related to effective use of educational technologies, including conceptions of teaching and learning, principles of instructional design and evaluation, and the process and effects of incorporating new technologies into education settings.
Production skills not required. Unlike NYU’s Interactive Telecommunications Program, the TIE program does not require basic computer literacy or video production skills. It is not a school for hands-on production work. Students are not expected to learn how to program interactive titles, nor are they expected to produce a final product. It is designed to be a think tank for those interested in understanding the influence of technology in a learning environment, and includes some pioneers in the field as teachers.
Gerry Lesser, TIE program chair, teaches courses on child development, the effects of visual media on children, and the design of education programs using various video media, ranging from TV broadcasting, to cable, to videocassettes. He was one of the principal architects in the creation of Sesame Street and is chair of the National Board of Advisors of the Children’s Television Workshop.
David Perkins, a lecturer within the TIE program, is a senior research associate in education at Harvard, an associate of the Educational Technology Center, and the co-director of Harvard Project Zero, a basic research project investigating human symbolic capacities and their development. He is world renowned for his work on the interactions between technology and advanced thinking and has written several books on the topic, including The Teaching of Thinking and Teaching and Thinking: Issues and Approaches.
Tinkertoys and technology. Judah Schwartz, a co-director of the Educational Technology Center at Harvard, teaches courses on the teaching and learning of mathematics and science as well as on the design of computer software. He has authored more than 20 educational software applications and has written a number of seminal papers in the field of technology and education. Schwartz is also a professor at MIT.
Other faculty members include Carol Chomsky, a linguist, who teaches courses on software design, educational applications of multimedia, and computers and language; Colette Daiute, whose research projects involve studying the value of multimedia composing tools for writers in multicultural classrooms; and Martha Stone Wiske, co-director of the Educational Technology Center, where her research focuses on the process and effects of integrating new technologies and guided inquiry approaches in schools.
Award-winning software developer George Brackett, who created the Bank Street Writer for the Macintosh, and David Docktorman, who is vice president of development at Tom Snyder Productions, which is one of the largest publishers of children’s educational software, also lecture at Harvard within the TIE program.
Emphasis on education. The school serves two types of people: those who want to know more about technology in education and those who want to work in education and use technology-based tools. The emphasis is on the value of technology for education, not on technology itself.
“It’s fair to characterize the program as an attempt to create critical producers and critical consumers of products in technological education,” says Schwartz. “Technology is just another [educational] tool. It’s seductive to some people and that makes me eager to use it, but my primary goal is to get people to think. The actual substantive knowledge that gets transmitted in the program is ephemeral.”
An E-mail away. According to TIE coordinator Yesha Sivan, there are about 19 students enrolled this year. And although the university would like to see the attendance number increase even more, for now the small class size means a great deal of individual attention for individual students. Professors are never more than an electronic mail message away.
After graduating, many of the students will find themselves working in publishing houses, software companies, other universities and as producers for public access TV, according to Sivan. “In a year you can’t do a lot with the technology,” he says. “You can expose students to a lot of different types of technology, and we do that part very well.”
INDEPENDENCE IS CORE AT MIT AND MEDIA LAB
Independent research is at the core of MIT’s Media Arts and Sciences program. Students accepted into a master’s or doctoral program within this school of MIT, which is affiliated with the MIT’s famed think tank, the Media Lab, develop their own concentration and curriculum.
Within the program, there are three broad topic areas of study including learning and common sense, perceptual computing, and information and entertainment. In order to be accepted into the program, a student must be sponsored by one of the professors who actively conduct research as well as teach within one of these topic areas.
Chart your own course. Upon acceptance, each individual can, for the most part, customize his or her coursework within a particular field of inquiry: today there are 83 different foci listed under the three topic areas. Some of the student-selected areas of study in the Media Arts and Sciences program include intelligent animation, speech recognition, robot design competitions, games, fractal-based bandwidth image coding, paperback movies, listening to television and salient stills.
All degree programs are heavily weighted on the side of research and practice, with education being very much in the “research apprenticeship” mode. In case it’s not already obvious, this is not a curriculum for individuals looking for structure.
The ability to work with independence is rewarded: each student at the graduate level is fully funded by the university, in addition to a monthly stipend they receive for the duration of their time at MIT. In return, they are expected to work about 40 hours a week as research assistants at MIT’s Media Lab, where they work on research programs and faculty projects, including assisting with courses.
Loaded with luminaries. As at NYU and Harvard, the school is loaded with luminaries from the respective fields of study. To name a few: Seymour Papert, Lego professor of learning research at the MIT Media Lab, is the force behind Lego/Logo, a programmable construction kit that enables children to control machines made out of Lego building blocks. Marvin Minsky is considered to be one of the founders of artificial intelligence. Muriel Cooper is head of the visible language workshop, which investigates ways of designing, browsing, navigating and expressing complex, multimedia and hypermedia information using computer graphics, artificial intelligence and physical, psychological and creative models. And Stephen Benton is the inventor of white-light holography.
In addition to the invaluable relationships formed with their professors, students have access to a wealth of information from past researchers, faculty and students, much of it seminal in the area of new media and communication. The school operates on an “open information policy,” so that all the results from research done at the MIT Media Lab are made available for use by all the students via MIT’s Technology Licensing Office and the Media Lab’s policies. (MIT holds the copyrights and patents on all research work done at the institute.)
Students enrolled in MIT’s Media Arts and Sciences program are primarily interested in pursuing careers in research. Many of the students who attend MIT, in fact, remain there. It is a place of ferment for anyone interested in emerging technology research, and despite the fact that little of its work makes it from the research lab into products, the Media Lab especially is widely considered to be doing some of the most important research around key technology issues of the future. Those who do venture out of the Media Lab find homes in corporate think tanks, including Thinking Machines, Interval Research, Apple’s Advanced Technology Group and Mitsubishi’s Electronic Research Laboratory.
PROFESSIONAL SCHOOLS GAINING POPULARITY, TOO
The growing need for focused education in multimedia technologies transcends the university setting, especially for potential students who don’t want to, or can’t afford to, attend school full time. Professional schools, continuing education programs and workshops that offer narrowly focused courses in individual areas of expertise are also gaining momentum. Unlike the degree-granting programs mentioned above, these courses offer professionals in the industry a chance to brush up in a specific technology area or forge new relationships with others who share their interests. (For a sampling of some of these programs, see p. 9.)
A WAR WON BY DEGREES
Technology in education programs are still evolving. At many of the schools, the curriculum changes with the available technology. But one thing remains constant at each of these schools: an understanding that new media — in all of its disparate forms — is really just a new service industry. They exist only to help us communicate more clearly with each other.
To date, institutions of higher learning are among the only places that encourage individuals to consider aesthetic and sociological values, not only the technological aspects, of new media. Indeed, the universities mentioned are creating a new generation of gatekeepers, discerning technologists who understand these nascent forms of communication, the tools and the issues surrounding them.
Perhaps the greatest challenge for individuals enrolled in these multimedia curricula will come once they leave the comfort of the university setting behind and join the fray in the private sector, bringing a deep and broad set of technological and aesthetic values with them. If they can successfully use those values to influence future developments of emerging technologies, that’s when they can say they’ve truly graduated.
Janice Maloney
BACK TO SCHOOL
Here’s a sampling of schools around the nation that offer comprehensive coursework in the fields of interactive telecommunications and multimedia. This list may seem sparse; however, within the next few years, we predict the number of schools granting degrees in interactive media studies will fill catalogs.
Arizona State University
Gary Bitter, program coordinator
Educational Media and Computers
Tempe, AZ 85287
(602) 965-4960, fax (602) 965-8887
E-mail: aogbb@asuacad
Bloomsburg University
Dr. Harold Bailey, director
Institute for Interactive Technologies
McCormick Building, Room 1212
Bloomsburg, PA 17815
(717) 389-4848, fax (717) 389-2094
E-mail: bai1@husky.bloomu.edu
Florida State University
Ed Forrest
College of Communication
Tallahassee, FL 32306-8742
(904) 644-8742, fax (904) 644-8642
Harvard University
Yesha Sivan, program coordinator
Graduate School of Education
The Technology in Education Program
Larson Hall, Appian Way
Cambridge, MA 02138
(617) 496-6072, fax (617) 495-9268
E-mail: sivanye@hugse1.harvard.edu
Massachussetts Institute of Technology
Linda Peterson, academic program coordinator
Room E15-224
20 Ames St.
Cambridge, MA 02139
(617) 253-5114, fax (617) 258-6264;
E-mail: linda@media-lab.media.mit.edu
Michigan State University
Dr. Gilbert Williams, director of graduate programs
Room 409
Communications Arts Building
East Lansing, MI 48824-1212
(517) 353-9151, fax (517) 355-1292
E-mail: 21998gaw@msu.edu
New York University
Red Burns, chair
Interactive Telecommunications Program
Tisch School of the Arts
721 Broadway, 4th Floor
New York, NY 10003
(212) 998-1880, fax (212) 998-1898
The Ohio State University
Rohan Samarajiva, chair
Dept. of Communications
3016 Derby Hall
154 North Oval Mall
Columbus, OH 43210
(614) 292-3400, fax (614) 292-2055
E-mail: comm+@osu.edu
Stanford University
Patricia Detton
Institute for Communication Research
McClatchy Hall
Stanford, CA 94305-2050
(415) 723-1941, fax (415) 725-2472
E-mail: patricia.detton@forsythe.stanford.edu
University of Southern California
School of Cinema Television/Student Affairs
University Park
Los Angeles, CA 90089-2211
(213) 740-2911, fax (213) 740-7682
CONTINUING EDUCATION PROGRAMS
The American Film Institute
2021 North Western Ave.
Los Angeles, CA 90027
(213) 856-7600, fax (213) 467-4578
Center for Creative Imaging
51 Mechanic St.
Camden, ME 04843
(207) 236-7400, fax (207) 236-7490
Pratt Institute
Isaac Victor Kerlow, chair of computer graphics program
200 Willoughby Ave.
PS21 Brooklyn, NY 11205
(718) 636-3600, fax (718) 622-6174
Ringling School of Art & Design
Maria Palazzi, computer arts department head
2700 North Tamiami Trail
Sarasota, Fl 34234-5895
(813) 359-7521, fax (813) 359-7517
San Francisco State University
Beth Rogozinski, program developer
Multimedia Program
425 Market St., 2nd Floor
San Francisco, CA 94105
(415) 904-7741, fax (415) 904-7760
The School of Visual Arts
Timothy Binkley
MFA Computer Art
141 W. 21st Street, 10th Floor
New York, NY 10011
(212) 592-2535, fax (212) 592-2560
>CHANNELS
NEW MULTIMEDIA DEAL STRUCTURES
Publishers adopt model of entertainment industry
Multimedia developers to date have followed a software developers’ model in the creation and distribution of their product as well as the structuring of their companies. In most cases their product and company development has been self-funded. Product development costs have been minimized, and any profit has been plowed back into the company. Overhead has been kept low. Templates have been designed, and content selected and programmed, to fit into those templates. And since the market has been so small and its future unpredictable, distribution has been concentrated in the traditional computer markets: mail order catalogs and software retail stores.
These strategies have been the best available to ensure the survival of a multimedia publishing company. Now, however, the market is substantiated, and growing. And as the business of multimedia has become more viable, the paradigm for developing, funding and distributing consumer interactive titles has begun to shift from a software paradigm to an entertainment industry paradigm. It is not precisely a film industry model, but a hybrid of the film and record industries, with some elements of the book publishing model thrown in.
WIDESPREAD DISTRIBUTION LEADS TO A HOLLYWOOD HYBRID DEAL
Before we can actually understand how development and funding for new media will evolve, we must first look at how the distribution channel is expanding, because it is the widespread distribution of these titles that acts as the catalyst that creates the shift in the business model for interactive media.
Distribution is the linchpin. We are now seeing the adoption of new media in software-only stores, consumer electronic stores and computer superstores. By the end of this year, though, consumers will be able to pick up interactive CDs in video and music retail outlets. Not surprisingly, customers will find music/video titles, interactive movies, film-type documentaries and other interactive media similar to these stores’ existing product lines.
The stores will even offer racks of MPC- and Macintosh-based titles for rental before this year is out. Bookstores, as we have said in earlier columns, will be the last holdout, waiting until the 1994 Christmas season before really making a commitment to sell CD-ROM discs.
EXPANDED CHANNELS KEY TO INCREASED FUNDING FOR TITLES
In the traditional entertainment industry (books, videos and music) distribution is second in importance only to good original material (the manuscript, the composition or the script). The breadth of distribution represents a product’s potential value and indicates its return on investment. Often in the movie industry, for instance, operating and development costs are not recovered until the film reaches foreign or secondary markets such as cable, pay-per-view and video rental.
And it goes like this. This is why the change in funding and development practices for new media is so tightly bound to distribution. As distributors in the entertainment outlets demand more “consumer-oriented” titles, i.e., compelling titles with more video and more music, the cost of production for multimedia developers is going to skyrocket.
This increased cost in production will prohibit the self-funding and isolated authorship that has been so much a part of the existing multimedia development model, and it will in turn initiate the movement toward a film-making model. And yes, you guessed it. Similar to the independent film model, distribution rights for interactive titles will most likely be pre-sold to fund the development of the title.
The end of the $50,000 prototype? At that point (and this is already beginning to happen), titles will be developed with writers, directors, producers, executive producers and agents. “Hyphenates” will work as they do in film: the writer-director, the producer-director, the writer-producer. Executive producers, agents and packaging agents will create deals using talent and name-branding. These packages and deals will be constructed prior to product development, sometimes prior to scripting or storyboarding. And unlike today’s new media market, money will change hands before a single piece of code is written.
We will see more use of original material, for which royalties will be paid. As full-motion video becomes refined and cost-effective, we will see more use of actors, musicians and writers, all of whom will work under their union contracts. They will expect residuals, royalties or other ongoing payment structures.
The mindset of creating a “box office hit” will take hold, driving decisions about funding potential “A” titles. This shift will take place over the next few years and will solidify once the secondary and international markets provide a significant source of revenue.
KNOW FOUR INDUSTRIES TO BUILD A NEW ONE
The new era begins now. We must watch the acquisitions of and investments in the pioneering companies of multimedia. We must track the strategic alliances among leading players in all the industries. We must watch for effective synergy between sister companies such as HarperCollins, Fox and News Corp., or Paramount and Simon & Schuster, or the various divisions within Time Warner.
We must become acquainted with the agents who control the talent, both in Hollywood and New York. We must standardize our distribution agreements and packaging, so that it is as easy to ship a CD-ROM title to software stores, bookstores and audio/video stores as it is to ship the standard video or audio tape. We must learn the language of all four industries, understand their payment and royalty structures, and the cultures that form an acceptable deal in each. We must become acquainted with the guilds that control the talent that will be recruited to make the titles. We must understand their histories, their inter-competitiveness and their power.
It is only in understanding all the dimensions of distribution, production and funding across all the industries touched by multimedia that we will move successfully into the new world of entertainment this technology will create.
Joanna Tamer
>CONTENT
TODD RUNDGREN-INTERACTIVE
A marvelous experiment in music creation
Composer, musician and computer hack Todd Rundgren has done something that’s never been done before: he has created an entirely modular musical program based on original music. He wrote a number of different full compositions, of different musical styles. But he wrote and recorded them in segments (of generally eight measures each, for the musicians out there). Each segment stands on its own as a musical clip, and each was written and recorded with the idea that they would be mixed and matched by someone other than Rundgren. That is, this entire musical experience is meant to be created by the listener.
The focus is the music. With TR-I: No World Order, which was created for the CD-I platform, Rundgren has focused entirely on the music. Unlike the David Bowie and Peter Gabriel discs that we discussed in Vol. 3, No. 2, p. 49, which rely heavily on digital video footage as part of the interactive experience, the visual aspect of Rundgren’s CD-I title is inconsequential. His goal was to expand the way we perceive and enjoy music — no small feat, even for a musician such as Rundgren, who in his 20-year career in the recording industry has constantly tried to broaden and redefine what a musical experience is.
MIX THE MUSIC TO MATCH YOUR MOOD
Once the user understands what options the disc offers, it becomes a very intriguing experience to find the musical mix that you like best or that best fits your mood. At the very least, you want to understand how each of the different options affects the playback of the music.
(We should note the term “mix,” when used in this piece, means the selection of clips. It does not mean that one can actually re-record the music, which is the common definition in the music industry.)
The program works like this: each segment of music has certain attributes, or “flavors,” associated with it, whether it be tempo, musical tone or mood. As you make your choices, the program calls up clips that fit the parameters that you have set. The interface enables you to be somewhat fuzzy in your choices; you can be as specific or general as you wish in your flavor selections.
31-derful flavors. The interface appears simple, but in some ways it is extremely awkward. There is only one navigation screen in the entire program. It is called the Flavor Editor. On the left-hand side of the screen are listed the “flavors” of the music that are available to the listener.
The flavors themselves include a great selection of musical variations, but some may be difficult for people without musical training to discern. The Tempo editor, for example, is straightforward enough, allowing you to choose the tempo or tempo range of the selections you want to hear. Others, like the Mix Editor, which allows you to “limit the performance to a particular quality of musical density,” are much more subtle. The choices in Mix include “thick,” “sparse,” “spacious,” “natural” and “karaoke.” The choices in Mood include “bright,” “happy,” “thoughtful,” “sad” and “dark.” There are a few instances of the same music recorded differently, so that you might notice the differences between mixes. Normally, you are choosing between different recordings altogether.
As you select the flavor you wish to alter, the options for that particular flavor show up in a list in the flavor editor (the middle column). Using the arrows under the list, you can choose any of the attributes. Using the arrows on the bottom of the flavor editor, you can determine how strict the program will be in selecting those attributes.
MUSIC ENTERTAINMENT WITH A LEARNING CURVE
I found the interface to be more difficult than it should be — especially for a disc designed for the consumer music market — although I understand why it was created the way it was. By clicking on one of the function keys of the CD-I remote, the list itself scrolls, while the highlight stays in the center of the screen. This is more disconcerting than you might imagine. The second part of this problem is that to change the direction of the scroll, you have to move to a different screen icon.
It would have been much more intuitive to select a function button, and then use the thumb joystick to scroll up and down. (In fact you can do this, but not in the “mode” in which you are creating your set of flavors and attributes. You can only affect changes with the joystick in “real-time mode,” which I’ll get to in a moment.)
It was designed this way, however, so that you could choose your range of attributes without being constrained to a linear list. That is, if you were choosing between five different attributes, and you wanted to make a selection that included numbers 4, 5 and 1, you would not be able to do that unless the list itself scrolled. You cannot click and choose individual attributes (like 1, 3 and 5), only ranges from a single selection. (The limitations of the interface are a partial function of the CD-I technology and pointer device, which are more limited than those of a personal computer.)
No direct access to the database. Embedded in the application is a database of the clips and associated attributes. The biggest problem I have with this title is that you do not have access to that database. Instead, the program chooses the clips for you; you have no control over sequence, inclusion or exclusion. All you can do is choose the parameters by which the program selects clips. Perhaps what I am describing is too technical, or too complex for such a program. But musically, I found that when I messed around with the flavors, experimenting until I understood the different parameters, the jumps between different selections often sounded too random.
Rundgren seems to have anticipated this issue, however, as one of the parameters that can be set is “Form.” The Form editor allows you to set how “conservative” or “creative” a version you get. That is, the program will actually select segments that are more in line with each other, if you want it to. In this way, you may get a number of clips in a row from a particular song, as opposed to a more random selection from a number of different compositions.
Real-time mode. After you have chosen your flavors and you press Action Button II, the program shifts into “real-time” mode. This is where you get to sit back and listen (yes, you can just listen to this disc). If you really like the settings you have selected, you can save up to five different sets, as CD-I players do have a limited amount of memory available. You can then go back to that setting another time.
Instead of watching the static editor screen all the time, there are three simple screen options you can choose while in real-time mode. Rundgren created two visual environments called Swarm and Warp, which are really just screen savers. The first is random swirling colored spots, and the second is a stream of geometric shapes coming at you. You can change the direction of the Swarm or the Warp with the joystick. The third option is to black out the screen altogether.
You can change the parameters while in real-time mode, but not in the same manner in which you set them. You can enable the program to scroll through and change the options with only the joystick. In this way, you can set some or all of the parameters to change when the thumb stick is moved either right/left or up/down. If you have one of the screen savers on, every time you alter the direction of the screen elements, you are also changing the flavors. This is the most random method of enjoying this title, as you have no way of seeing what changes you have made to the program.
Same bricks, different building. I especially enjoyed listening to each of the five versions created by the well-known music producers who worked on the project: Don Was, Jerry Harrison, Hal Wilner, Bob Clearmountain and Rundgren. While each of them had the same basic building blocks to work with, it was immediately apparent that each has a particular style. I found that listening to the music with the default settings and simply changing producers was the most enjoyable way of experiencing the music. This is not to say that anyone else could not have come up with an equally enjoyable mix, but these producers most likely had access to the database of segments and were able to create their musical environments with more control. [Rundgren also released a linear version of No World Order for standard CD audio players, which contains Todd's Mix, as he calls it.]
TAKING RISKS TO CREATE A NEW MEDIUM
The review copy of TR-I: No World Order I received had no documentation, and it took a good two hours or so for me to figure out how best to navigate through this title and how my actions affected what I was listening to. (There is online instruction, but it’s not very informative.)
During this time, I was frustrated with the program itself — and not paying too much attention to the music. There was no direct response to my input, and I was still unsure what each of the different flavors and parameters actually changed. I spent a lot of time clicking the action buttons and wondering why anyone would want to buy and use this disc, as it was just random audio clips and an awful interface.
The more I experimented with this title, however, the more involved I became. Eventually, as I became more familiar with both the music and the interface, I enjoyed finding out how my actions affected the selection of music. At that point, I was able to set the program, shift to real-time mode and just listen.
Tackling art and interactivity. One can question whether what you get out of this product is, indeed, “music” as we define it today. After all, throwing together a bunch of random clips can make for a very disjointed musical experience. The seemingly random jumping from clip to clip can get frustrating. (Just when you’re getting into a groove, it changes!) Even the linear version of the music suffers from this problem.
But Rundgren has gone a long way to find some answers to a number of questions that have plagued creators in the emerging world of interactive media: How do you create non-linear entertainment? Can you enjoy an interactive program without having to “do something” all the time? Would you, as an artist, want someone else to mess with your creation? Todd Rundgren has created a musical canvas with the express intention of letting his audience find their own way through.
Will his audience enjoy this product? Only if they are willing to spend the time with it. If you simply want to listen to Todd’s Mix, then just buy the audio CD.
TR-I: No World Order will be available in September for $25.
David Baron
>NEWS
CHANGES AT FIRST CITIES
Growing pains or the death knell for multimedia industry group?
Less than a year after the First Cities initiative was made public (see Vol. 2, No. 7, p. 3), rumors have begun to fly that the multimedia industry consortium is dead in the water and will quietly disband at the end of this month.
According to the Microelectronics and Computer Technology Corp. (MCC), the Austin, TX-based R&D cooperative that organized the First Cities project, those rumors are false. “The consortium has made some changes but is progressing toward Phase II [developing site trials],” says Brian Kushner, MCC’s vice president and executive director of information systems and vice president of corporate development. “There is no truth to the rumor that First Cities is shutting down.”
CONSORTIUM ENCOUNTERS SETBACKS
While members of MCC are adamant that the First Cities project is alive and well, we would not exactly say it is thriving. Since Digital Media last covered the consortium, it has experienced some setbacks.
To begin with, First Cities has been unable to attract “marquee” names from the cable and content industries as it expected it would earlier this year. In fact, the consortium, which expected “lots and lots of companies” to participate in Phase II, is down several members from Phase I.
Lacking content, conduit. According to Kushner, of the 13 members we identified, only Bellcore and Comsat have officially announced their intention to participate in Phase II, which involves a greater financial contribution and participation in actual site development.
Kaleida Labs has signed a letter of intent, but charter members including Apple, Kodak, Tandem, Corning, Bieber-Taki, North American Philips, Sutter Bay, Southwestern Bell and US West have not officially stated their intentions. (Off the record, several of these companies confirmed that they would not be participating.)
In addition to charter members Bellcore and Comsat, which are Level I participants, the group has added five “associates” including Hughes Broadband Technologies and several universities. (An associate in the First Cities consortium makes a smaller investment and in turn receives slightly lesser benefits.) According to Kushner, First Cities has letters of intent from several cable and telephony companies.
These telecom companies as well as media companies that can supply entertainment programming and content are critical to the success of First Cities since the group does not own either content or conduit.
AT&T kept from joining. According to Dennis Bieber of Bieber-Taki, a “boutique venture capital company,” which is currently not involved in the consortium’s activities, it was veto power inside the group, not lack of interest from powerful companies on the outside, that prevented some of the major players in these industries from joining First Cities.
“If there were no veto powers,” Bieber says, “it would have been a vibrant consortium. I sponsored AT&T and was very disappointed when they were not permitted to participate.” Bieber explained that two members within the group vetoed AT&T’s involvement. AT&T then signed an agreement to participate in the Castro Valley trial with Viacom.
HAS ‘ALLIANCE FEVER’ MADE FIRST CITIES OBSOLETE?
Ironically, it is exactly these types of alliances that have prevented the consortium from getting off the ground, according to another individual who has been involved in the First Cities project.
“The whole idea of First Cities has been made obsolete by all of the large companies that are independently creating test beds using their own money and resources,” says the individual who spoke under the condition of anonymity. “Bell Atlantic is doing 50,000 homes in New Jersey; AT&T is working in Castro Valley; Time Warner, in Orlando. These were the types of things that were supposed to happen through First Cities.”
Ultimately, he believes the group suffers from the same problem many consortiums suffer from. “When you bring representatives from all these disparate groups together, you are bound to experience conflict based on different cultures, different agendas, different understanding of the goals and purposes.”
SIDRAN TO LEAVE FIRST CITIES PROJECT
In addition to the loss of several important potential corporate sponsors, First Cities is also about to lose Bruce Sidran, the project’s executive director. According to MCC’s Kushner, Sidran will be leaving the multimedia industry consortium at the end of this month and returning to Bellcore. (Why Sidran is leaving remains an unanswered question. He was unavailable for comment despite our repeated attempts to reach him.)
A new leader. The First Cities project has not been left without someone at the helm, however. Tom Reiman, formerly executive vice president of Sutter Bay Associates, has taken the lead position at First Cities.
“Tom has the charter and the mantle to lead First Cities,” says Kushner. “He will assume Bruce’s position.” Already Reiman, who has a background in telecom and real estate, has taken on the role of site development director, aggressively working to move the First Cities project into Phase II. His goal is to establish at least two trial sites (one based on a cable infrastructure and the other on a telco delivery system) by the end of this year.
“Originally First Cities’ charter was to go out to identify members, identify sites and develop architecture,” says Kushner. “The change is that we plan to focus on specific sites.”
To date, First Cities has held meetings in three sites, according to MCC. They include Albuquerque, NM; Omaha, NE; and Des Moines, IA. None of these sites has agreed to participate yet. A fourth site in Rochester, NY, is under review. In addition, the group has been contacted by several sites that are interested in working with the consortium, according to Reiman.
A state of limbo. At this point, however, the First Cities project is in a kind of limbo between Phase I and Phase II; it does not have the luxury of time or finances to remain in the “deep think” portion of Phase I and it lacks the types of corporate sponsors necessary to fully develop the technology for a trial city.
Getting the locals involved. In order to move the project into Phase II, Reiman and MCC have modified the charter of First Cities to include a more hands-on approach by the local government, media companies, cable operators and telephone service providers at the actual trial site.
Reiman believes that in order to move forward, the group will not only need a commitment from one of these cities, but will also require substantial financial investments and community support. “We are trying to emphasize the grass roots, local ownership of these sites,” says Reiman. “We feel it is critical to our success.” He added that “the capitalization of each site will be customized for each site.”
It is Reiman’s goal to announce two trial sites by the end of this year. And we believe it is essential to the group’s survival that First Cities meet this goal.
As several individuals involved in the consortium pointed out, the large media and telecom providers are not waiting around for any industry consortium to set standards on how to deliver interactive media into the home. They want to do it themselves and force a standard, which is not necessarily in the best interest of all of the disparate groups that want to be involved in delivering interactive media to the consumer.
It is important, then, that we encourage projects like First Cities that are attempting to provide open standards and interoperability. Despite its setbacks, First Cities is still a good idea that deserves the attention and support of the various players in the convergence industries. As Reiman says, “Our success definitely depends on this industry believing in our concept and supporting us.”
Janice Maloney
THE STATE OF THE INTERNET
News and views from INET ‘93 and Interop conferences
No longer the domain of researchers and scientists only, the Internet, a global computer network service that is an information pathway to millions of PC users, is evolving. It is steadily moving toward a more commercial-oriented information service for the business community, and, in fact, it is even being tapped to deliver interactive consumer services into the home. (See Cablevision coverage below and on p. 3 and News Corp. buys Delphi, p. 27).
Today, the Internet includes 16,000 interconnected networks in 60 nations. When last counted this past July, there were 1.776 million hosts connected to those networks, which probably translates to more than 15 million active users, depending on how many one assumes per host. (The 1993 average growth rate in the United States is 7.42 percent per month and 9 percent outside of the U.S.)
Access to the Internet. The number of networks connected to the Internet is also growing rapidly. (See The Staggering Scope of the Internet, Vol. 1, No. 11, p. 19.) For example, nearly all the commercial networks, including Compuserve and MCI Mail, have established E-mail gateways with the Internet. You can exchange E-mail with people on the Internet, but you cannot easily search for information, retrieve files or otherwise access data.
Non-commercial networks such as the global Fidonet and UUCP (Unix-to-Unix Copy Program) networks are also growing and offering connections to the Internet. Bulletin board software, which began with hobbyists, is now moving into commercial application, and many bulletin board packages have or promise support for Internet connectivity.
The bottom line is the Internet is growing like a weed and becoming increasingly commercial and global.
In an attempt to track that growth and to understand better where the Internet is heading and who the players are that will be leading its development into the 21st century, we covered the highlights of two of the largest internetworking conferences, INET ‘93, the international conference of the Internet Society (ISOC), and Interop, the internetworking trade show, held this past month in San Francisco.
INET ‘93 PROVIDES GLOBAL VIEW
INET ‘93, the International Networking Conference, is sponsored by ISOC, which is made up of members from the engineering community that designed the Internet communication protocols and the mechanism for evolving them. This is the second INET conference; last year’s was held in Kobe, Japan.
Developing nations come online. Since Internet use is concentrated in the industrialized nations, INET was preceded by a workshop for developing nations. This year the workshop was attended by 126 people from 67 countries. Participants enrolled in one of three tracks.
The first was for those from nations with little or no connectivity, who learned to build dial-up networks based on the UUCP or Fido protocols.
The second was for more advanced nations wishing to establish networks using the TCP/IP protocols. The third track, which assumed you had network access, covered the resources and services available on the Internet.
These were hands-on workshops in which participants configured, installed and connected networks. They also received Novell router software and textbooks. After the workshop, these attendees participated in the formal INET Conference, helping to integrate them into the social network as well as the electronic one.
91 nations at INET. The actual conference was attended by 900 people from 91 nations. The attendees are not general Internet users, but heads of regional and national networks, internetworking vendors and influential Internet engineers. There were 88 papers from 30 nations. The papers were presented in six tracks: network technology, network engineering, application technology, user applications, policy issues, regional issues and empowering new users.
FROM INTERNET PROTOCOLS TO AUTOMATED AGENTS
The network technology and network engineering tracks covered infrastructure topics such as packet routing and host addressing, extensions to the Internet protocols for multimedia, broadcast and mobile hosts, traffic measurement and capacity forecasting, and network operation and management. Sessions on security reflected increasing commercial interest in the Internet.
Making Internet easier to use. The application technology track focused on what the user sees. Papers covered everything from techniques for organizing and retrieving the vast amounts of information on the Internet — including the use of Gopher, a popular program for information retrieval, which saw a 1,000 percent increase in usage this year — to finding people through improved interface designs and automated agents.
There were also a number of papers on multimedia and broadcasting. Video coverage of the plenary sessions was broadcast on the Internet. However, the existing Internet protocols and data rates limit video to a few frames per second at unpredictable rates — not exactly CATV.
The user application track also had papers on libraries, K–12 schools, community information services, virtual communities, culture and reality, and global emergency management and monitoring. K–12 education is a fast-growing Internet segment (in the U. S.), and pending legislation calls for acceleration of this trend.
Not just a technology testbed. The policy issues track dealt with the impact of alternative charging and subsidy models. How do we encourage growth of the Internet while pursuing social equity and other public goals? ISOC president Vinton Cerf quipped that the Internet was as much a testbed for policy development as for technology development. Papers in the regional issues track presented special concerns and the status of networking in Asia-Pacific, Central and Eastern Europe, Western Europe, Africa and Latin America.
The conference keynote speaker was John Young, who recently stepped down as president and CEO of Hewlett-Packard to become chairman of Menlo Park, CA-based Smart Valley, Inc., a non-profit organization that plans to facilitate the implementation of information services and communication links in the Silicon Valley region. The company will work in support of would-be service providers, application developers and end users from all segments of the community.
The final and most interesting of the three plenary sessions featured Bob Metcalfe of Infoworld magazine and Mike Nelson, assistant director of the Office of Science and Technology Policy. While Metcalfe used his time in the limelight to chide ISOC for ignoring personal computers and took a position on government’s role that would have made Rush Limbaugh grin, Nelson reviewed the White House position on information systems.
The role of government. Nelson does not see the government building the information infrastructure but does see the government funding R&D on new technology, demonstration projects and “on-ramp” construction in schools and libraries.
In addition, he said the Administration will enact policies that will stimulate privately funded infrastructure development and deployment. Most importantly, Nelson spoke of a global information infrastructure, not merely a national one.
It’s encouraging for us to see that there is someone in the Executive Office of the President who not only has an Internet address but knows what the file transfer protocol, or ftp, does. (Basically, ftp works like an electronic bookstore or library, allowing users at one computer to enter the address of another user virtually anywhere in the Internet and browse through file directories until they find a document or program they want.)
COMMUNICATION PRODUCTS CORNUCOPIA
Interop was held in San Francisco the week after INET. It has its roots in the same community as INET, but has become a huge trade show. This year there were more than 490 exhibitors and 65,000 attendees. Next year Interop will merge with Networld and move to Las Vegas (as well as organize shows in four other cities around the world). The merger with Networld reflects the fact that local area networks are rapidly being linked to form enterprise networks. The people building and using these networks come to Interop.
ATM on the horizon. It is difficult to summarize 490 exhibits, but a few items stood out. There seems to be near consensus that ATM (asynchronous transfer mode) technology is the wave of the future for connecting wide-area and large local area networks. The predicted success of ATM is motivated by multimedia and other applications that require a lot of bandwidth and ultra-fast communication capabilities. (ATM switches will be used in interactive CATV trials such as the one Time Warner plans to run in Orlando, FL.) Today’s prices to build the ATM infrastructure are high — a single data port product can cost $15,000 — and standards are not yet firm, but ATM is on the horizon.
In the shorter run, local networks will soon see “fast Ethernet” — 100-megabit-per-second transmission over copper wire as opposed to 10 megabits per second using traditional Ethernet. Several Interop exhibitors were demonstrating prototypes, and at least one, Grand Junction, of Union City, CA, said it was ready to ship product now. (Most promised shipments early in 1994.)
All is not clear, however, since there are two competing standards (802.12 and 802.14) for fast Ethernet. They use different access methods and cabling, and have pitted large companies, including Hewlett-Packard and Intel, against each other. Prospective users may wish to wait for the marketplace to pass judgment on these standards, but whichever prevails, at 100 megabits per second you may never need to install fiber to desktops.
BRINGING THE INTERNET ON HOME
The keynote speaker at Interop was author and futurist George Gilder — a very optimistic man. Gilder predicts that transistors and bandwidth will be essentially free in the next century. Cheap bandwidth will result from the elimination of electronic amplifiers and multiplexers in optical communication systems (this is already happening), clever encoding and shifting to higher frequencies in wireless systems.
Gilder pointed out that one can trade off terminal complexity for bandwidth. That is, if both bandwidth and processing were literally free, engineering tradeoffs would be arbitrary. He expects to see dumb networks connecting smart devices.
He also predicted that these networks will be the engine of economic growth since they will allow further specialization and make for efficient capital markets. They will increase the efficiency of other markets as well, but since they will erode national boundaries, today’s industrial nations may suffer as a result.
HP speaks on ITV. The most visible emissary from the world of interactive TV was Hewlett-Packard’s Robert Frankenberg, who gave a plenary talk similar to his Digital World presentation (see Vol. 3, No. 2, p. 39). He foresees interactive television as the world’s largest transaction processing system. Hewlett-Packard, which will only work on hardware such as set-top boxes, remote controllers and file servers, plans to build a core settop box with optional add-ons. If the add-on resembles a computer, and the head-end is on the Internet, this would provide connectivity from the home.
What channel is the Ethernet on? There were some interesting announcements regarding digital data (Ethernet) being delivered over CATV into the home. Zenith of Glenview, IL, showed a CATV modem designed for the home user and said it has plans for related products. LAN City of Andover, MA, was also on hand with Ethernet over cable TV, a technology developed by Digital Equipment Corp. The biggest buzz of the show was the announcement that Internet-access provider Performance Systems International (PSI) of Herndon, VA, would offer Internet connectivity to customers of Continental Cablevision.
In spite of the interest this announcement generated by both the media and attendees, few details were actually released. Marty Schoffstall, PSI’s chief technical officer, predicted a rosy future for cable television access to the Internet, however. He said he believes the Internet and cable company cultures are compatible — both are made up of “cowboys.” Schoffstall gave no details on technology or price, but the initial offering is rumored to be 10 megabits per second at $70–$100 per month. Service is expected to begin in early 1994, and other options and deals with other cable companies are promised. (For more on the Cablevision announcement, see p. 3.)
Bridging the Internet-fax gap. Carl Malamud, a well-known internetworking author and consultant, demonstrated a means of bridging the Internet-fax gap. He is distributing free software that lets Internet hosts receive E-mail messages (text or graphics) and automatically forward them to a specified fax phone number. The message forwarder might do this as a free service (perhaps within a corporation or at a public library). Alternatively, they could obtain revenue by charging a fee or by printing a paid ad at the bottom of the fax cover sheet. There are already servers in several cities, and several companies are buying advertisements.
One can gain some insight into the differences in the Internet and interactive TV cultures by considering the motivation of Malamud and his collaborator Marshal Rose. When asked what they may get out of providing this gateway software, they jokingly replied “an indictment by a federal grand jury?” More seriously, their goal is to do research on extending global connectivity. And they plan to do it in the traditional Internet manner. First you try something, and if it works, you describe it publicly and make it available. It becomes a “standard” if others adopt it.
And a partridge in a pear tree. A report on Interop would not be complete without mentioning the Show Net. The raison d’être of Interop is to demonstrate that the jumble of equipment and protocols on the market can truly interoperate. As such, every vendor on the floor is required to connect to and use the Show Net. This year’s Show Net had 6,000 hosts and 580 subnets, connected by 15 routers, 100 hubs, 76 bridges, 54 T1 lines, 6 T lines, 85 miles of unshielded twisted pair, 14 miles of optical fiber, 6 miles of shielded twisted pair, two miles of coax, and 16 wireless links and LANs! This hardware babel was compounded by support of networking protocols IP, OSI, IPX (Novell), LocalTalk and Token Ring.
SAME GOAL BUT TRAVELING DIFFERENT PATHS
What became especially clear for us after attending both of the INET and Interop shows — especially following on the heels of Digital World, where the topic on everyone’s lips was ITV — is that the interactive television and Internet communities are dissimilar groups heading in similar directions. Both groups want to build “the network of networks.” They are just at a crossroads when it comes to the best way to build it and what to put on it once it’s finished.
Two different worlds. The Internet uses mostly telephone architecture as its delivery system, while most interactive TV development to date has focused primarily on large cable TV operators. (This situation appears to be changing, as more and more cable operators look to the telephone model for new network architectures.)
The bread-and-butter interactive TV applications are movies on demand and electronic shopping, whereas the Internet focuses on messaging and information retrieval. The Internet began with research users and is moving toward business and classrooms; interactive TV customers are at home. Every user can offer services on the Internet; the interactive TV community is used to centralized production and broadcast from few to many.
If you remove the distinctions in media (after all, bits are bits to a microprocessor), assume access from every home and every office (coming true today), and look to the time when television systems are constructed on a switched, not channelized, architecture, though the two proposed systems really are functionally equivalent.
It will be as interesting to see the convergence of these communities as it will be to watch the convergence of the media.
Larry Press
Larry Press is a professor at California State University, Dominguez Hills, and a columnist at the Communications of the ACM. He taught in the workshop for developing nations and presented a paper at INET ‘93.
MEDIA GIANTS RESTRUCTURE
New media moves out of the backroom and into the boardroom
The latest fad for the large media conglomerates seems to be corporate restructuring. Viacom International, Capital Cities/ABC and Philips have all reorganized their corporate structures in the past month to take advantage of the new opportunities afforded by new technologies and interactive media.
All of these reorganizations, as well as other, similar reorganizations that took place recently at AT&T, Paramount, Tribune and Time Warner, have one thing in common: the interest and activities in digital media are closer to the top of the company than ever before.
VIACOM CREATES GROUP FOCUSED ON CASTRO VALLEY
Even though Viacom has an interactive media division, Viacom New Media, the company has now applied a corporate-wide structure to its new development efforts. Prompted by the need to find quality interactive programming for its Castro Valley project, Viacom will be actively searching out and developing programming for the ITV trial, both internally and externally. (As Digital Media went to press, talks between Viacom and Paramount were heating up. Look for more in-depth coverage in next month’s issue.)
The company gave the newly created position of president of Interactive Television to Thomas Dooley, who has been with Viacom since 1980. Dooley, who has held a number of positions in finance and business management, including vice president of finance, the treasurer of the company and senior vice president of corporate development — a title he will continue to hold — has no experience in creative content development or engineering.
The business of ITV. He is expected to create a financially viable operation out of Viacom’s diverse activities in interactive television, including both technology and programming. Dooley will report directly to Frank Biondi, the president and CEO of Viacom International.
This undertaking will be no easy task, as it will require the coordination of a number of entities, including the television networks (Showtime, Nickelodeon, MTV), as well as the Viacom Corporate Technology Group and Viacom New Media.
On the top of Dooley’s “to do” list is getting the Castro Valley project up and running. To do this, he has brought on board two new Viacom executives, who are charged with actually running the Castro Valley operations.
Robert Meyers, now vice president of corporate development for the interactive television group, will be responsible for managing the Castro Valley project. Meyers has been a project manager for Viacom since 1989, and was at NBC for 10 years prior to that.
Peter Miller, vice president of corporate development for Interactive Television Applications, is responsible for the interactive programming on the Castro Valley system, which includes building relationships and obtaining programming outside the company. Miller, who was an independent consultant before coming to Viacom, was instrumental in starting Apple’s interactive television project under the Advanced Technology Group between 1990 and 1992. Before that, he worked for Lotus Development and ON Technology.
New Media remains in-house developer. Viacom New Media will continue to develop interactive programming as an in-house studio under Michele DiLorenzo, now executive vice president of the group. The New Media division made its own personnel announcement, bringing former Sega marketing executive Al Nilsen to the company as vice president of marketing. Nilsen ran the product launches for the Sega Genesis machine, as well as both Sonic the Hedgehog titles.
ABC MULTIMEDIA ON PAR WITH NETWORK TV
Elsewhere in the world of television, Capital Cities/ABC announced that it has formed a new division, the Capital Cities/ABC Multimedia Group, reporting directly to the CEO of the parent company, Daniel Burke. The Multimedia Group will be headed by Stephen Weiswasser, senior vice president of Capital Cities/ABC and now president of the Multimedia Group.
Cap Cities Multimedia. Weiswasser will be in charge of developing new business opportunities in interactive television, pay-per-view, home video (including videotape and laser disc), HDTV, and — it would appear — anything digital. He will be “centralizing and expanding the company’s activities in new and emerging media technologies,” according to the official statement. ABC News Interactive, the company’s most visible foray into digital media to date, will be a part of this division, although the company has been very quiet over the past year. (Weiswasser declined to be interviewed at this time, as he feels that he is still getting up to speed on the new division.)
In addition to new media technologies, Weiswasser will be responsible for the corporation’s legal and governmental affairs department. Before the creation of the new division, he was an executive vice president of ABC News; before that he ran the day-to-day operations of the ABC Television Network.
The new division will be on par with the other major divisions of the corporation, which include the Television Network Group, the Publishing Group, and the Broadcast Group. For a company as big as Capital Cities/ABC, creating a multimedia division on the same corporate level as its core businesses is a clear indicator of just how important emerging new media and interactive television markets have become to the company. Weiswasser’s legal and government background also signals that the company will be keeping a close watch on regulatory and intellectual property issues.
PHILIPS CREATES UMBRELLA GROUP FOR NEW MEDIA
Philips, which has been slogging through the digital media minefields for years with its Compact Disc-Interactive format, has also created a new structure for its digital media activities. The difference between Philips and Viacom or Capital Cities/ABC is that Philips has been devoting significant corporate resources to interactive media — with its CD-I technology — for nearly ten years. In that time, however, the company has failed to establish a beachhead for consumer interactive media players or titles. The other difference is that these changes appear to be largely cosmetic, with one exception — Philips will begin producing titles for platforms other than CD-I.
With the goal of coordinating and streamlining both development of new titles and international marketing and sales efforts, Philips established Philips Media six months ago, the uber-structure for all of Philips’s electronic media activities worldwide. This includes Philips’s participation in companies like Blockbuster Video, Whittle Communications, Activision, General Magic and its international cable television and telecommunications operations.
Scott Marden, president and CEO of Philips Media, has taken all of the interactive media elements and merged them into a single publishing structure called Philips Media Electronic Publishing (PMEP). Philips Media is a division of the consumer electronics portion of the company. Marden reports to Philips Electronics CEO Henk Bodt. Polygram remains a separate entity, 80 percent owned by Philips.
Individual content labels. The new PMEP structure divides all of the content creation entities into separate groups focused on particular market areas. Each of the labels’ presidents will report to Marden. They are the Children’s Labels Group, under Sarina Simon; the Games Labels Group, under David McElhatten; the Home Entertainment and Special Interest Labels Group, under Ann Kronen; European/Country Labels Group (odd mix!), under Jean-Pierre Isbouts; Education Labels Group, under Bernard Luskin; and the FMV/Digital Video Group, under Graham Wilson.
Each of the labels’ presidents will be responsible for the success or failure of the individual divisions, based on their expertise in the particular markets they serve. Editorial and product decisions, however, will go through an approval process that includes both Marden and the North American operations.
The end of PIMA. In this reorg, the former Philips Interactive Media of America (PIMA) and the positions of chairman and president of PIMA have been eliminated. Those positions were held by Gordon Stulberg and Bernard Luskin, respectively. Stulberg is now acting as a consultant to the company (which is corporate lingo for saying that he has retired). Luskin has assumed the role of COO of the North American activities of PMEP, where he will be responsible for all of the business structures of PMEP on this continent, including business affairs, legal, financial, product testing, etc. He will also be part of the editorial process for title development and coordination. This is essentially the same role he held as president of PIMA.
The other half of this restructuring was the creation of a new, international marketing and distribution operation, under the direction of John Hawkins, president and general manager of Philips Media Distribution. Emiel Petrone, who has handled the sales and marketing operations for PIMA, will oversee the North American sales and marketing of Philips Media Distribution and will report to Hawkins. His operations, however, will be coordinated by Luskin.
Business as usual? While PMEP representatives say that the details on just how the new structure will work are still being hammered out, the shift from PIMA to PMEP appears to be cosmetic. While the official statement from Philips highlights new reporting structures, it appears that, in practice, it’s business as usual. (The parties affected by this restructuring were meeting in London as Digital Media went to press and were not available to answer some of these questions. If it is indeed the case that little will change in daily operations, we have to ask ourselves: Why did they make the reorganization statement in the first place?)
It’s not just CD-I anymore. The goal of the new structure is to leverage the size and international scope of the Philips corporation not only for CD-I, but for all forms of digital interactive media. Does that mean that Philips will start producing titles for other computer and consumer electronics products? “Yes. And broadcast,” says Luskin. “We must diversify strategically to generate the revenue to compete successfully [in the interactive media market].” He also reiterated Philips’s full commitment to CD-I.
The admission that Philips needs to diversify its interactive media production is significant. CD-I players have not sold very well, and the company has spent literally billions of dollars on title development that has shown almost no return. It is long past time for the company to take decisive steps to leverage the numbers of creative and talented people (and subsequently, the money to support them) into a successful business, before Philips bankrupts itself trying to recoup its investment in CD-I.
WINDOW DRESSING OR A FUNDAMENTAL SHIFT?
It is no secret that the big media giants have been struggling for the past few years to find a way to best leverage their assets in new technologies. The initial forays into new media for many of these companies tended to happen in small, experimental divisions, which, if measured by the number of interesting CD-ROM titles each produced, cannot be labeled successful.
The problem, of course, is that digital media became relegated to its own ghetto, while the rest of the company got on with its traditional products. There was not enough cross-pollination, in talent or funding, to create a full-fledged business for these companies. Now we are starting to see a fundamental shift in that restructuring.
The people charged with creating interactive media products are now reporting directly to the top of these companies. The attention to new technologies is now in the boardroom, not only the backroom.
Time will tell whether any of these changes will result in successful new products. The implementation of digital media platforms will be playing out over the course of the decade, and only the companies that adapt to the changes and make the transition will be around to reap the benefits of the new, and still ill-defined, markets. All of these companies realize, however, that a sizable portion of their future is tied up in interactive media, and its successful development is too important to be left to mid-level divisions.
David Baron
PUTNAM NEW MEDIA MAKES ITS DEBUT
MCA, Bertelsmann and Putnam Berkley back interactive publisher
Putnam New Media appears to be a rather modest interactive publishing startup — unlikely to garner or generate big news in the emerging new media marketplace. It is a small operation run by one person out of her home in Great Falls, VA — not exactly a publishing or technology mecca. Its first title, Big Anthony’s Mixed Up Magic, which is expected to hit the CD-ROM retail channels next month, is sound but not seminal.
On the surface, it seems to be a company that can be easily dismissed when counting off which of the new media players will dominate the emerging interactive entertainment landscape. When you dig below the surface, however, the odds begin to change. Putnam New Media is rich in potential.
A child of privilege. The Putnam New Media group, which was launched a year ago this month, is backed — in terms of capital, media and creative resources, and distribution and marketing muscle — by some of the largest entertainment media companies in the world. It is a division of The Putnam Berkley Group, one of the most profitable commercial publishers in New York. Its real roots, however, are much more closely entwined with its parent company: MCA/Universal, a subsidiary of Matsushita Electric Corp. of America.
It was MCA president Sid Sheinberg, in fact, who encouraged Phyllis Grann, CEO of The Putnam Berkley Group, and president David Shanks to explore electronic publishing — a fairly revolutionary concept for a publisher that to date has resisted even developing a line of “books on tape.”
Based on the meeting with Sheinberg, Shanks began formulating a business plan for a modest electronic publishing division, which would basically convert the company’s existing line of commercial print media onto CD-ROMs. He then went in search of someone to run the group, and through a mutual friend, met Cris Popenoe, a 20-year veteran of the video, record and book industries, who was looking to combine her skills in the interactive publishing arena.
An evolutionary step vs. a giant leap. While Shanks presented Putnam New Media as an evolutionary step toward interactive media publishing, Popenoe pitched her idea for a company that would “create a whole new paradigm for how you tell a narrative.” They mutually agreed to a trial period, during which time Popenoe worked as a consultant, analyzing the market and looking for the best way for Putnam to proceed in this emerging field.
After three months on contract, Popenoe received the blessings of both Putnam and MCA management and became president and publisher of the startup. To date, she has run the entire operation out of her home office, keeping overhead low, so that she could pour money into title development. On average, her development costs, including outside production, are about $400,000 per title.
NOTHING LIKE A LITTLE SUPPORT FROM ‘FAMILY AND FRIENDS’
The Putnam Berkley Group funds 50 percent of Putnam New Media’s title development and operations costs. Oddly enough, the other half of Putnam’s money comes from the Bertelsmann Manufacturing Group, a division of Bertelsmann (the German media conglomerate), which has a long-standing relationship with The Putnam Berkley Group through its printing operations.
The Manufacturing Group has signed a two-year agreement — renegotiable in 1995 — to help fund title development and cover operating costs of Putnam New Media. In return Bertelsmann shares the profits and losses on each of the titles it helps fund. It does not have equity in The Putnam Berkley Group.
A chance to experiment. “Bertelsmann wanted to dip their toe into the new media market and felt good about the direction we were going in,” says Popenoe, who added that the group has also opted to fund several additional CD-ROM projects that were not in the original 1994 business plan.
In addition to financial support, Bertelsmann is providing Putnam New Media with technical support.
Rich in resources. At this point, MCA and Matsushita do not contribute financially to Putnam New Media, which is actually MCA’s first official foray into interactive media publishing. (The company has, of course, invested in 3DO under the guidance of MCA executive vice president Charles “Skip” Paul — a lightning rod for MCA’s new media ventures. Paul, who is a maverick within the industry and within MCA, continues to investigate interactive media development projects for MCA — both external and internal to the company.)
What MCA and Matsushita are offering Putnam may ultimately be of greater value than capital. “I am taking advantage of their resources,” says Popenoe, who was planning to meet with MCA’s director of rights and merchandising as Digital Media went to press. “There isn’t a specific title [at Universal Studios] in mind. Our goal is to look at everything and see what makes sense.”
In addition to access to MCA’s media libraries, which include content from Universal Studios and Geffen Records, Popenoe also has access to MCA’s formidable talent pool. “What seems to be happening is a lot of the creative people at Universal are beginning to think of me when they think of interactive media, and they are coming to me with ideas,” says Popenoe, who would not name names, but said deals are in negotiations with several well-known musicians and animators. “More than anything else — since we really want to focus on original titles in 1995 — MCA has become a good source for creative talent.”
DAY-TO-DAY OPERATIONS INDEPENDENT OF THE PARENTS
While Bertelsmann, MCA and The Putnam Berkley Group support Putnam New Media, they do so from a distance. Day-to-day operations, including the acquisition and development of titles, contracts, the development of distribution channels and marketing campaigns, and packaging design, fall under Popenoe’s jurisdiction.
“Unlike other [interactive publishing] companies out there, I am having to create everything from scratch,” says Popenoe. “Ultimately, though, I believe a new operation like ours must be independent from its parents. It is essential that someone within the group be responsible for profit and loss, be responsible for a business plan. ”
KEEP OVERHEAD LOW, INVEST IN TITLE DEVELOPMENT
Popenoe’s business plan to date has been to keep staffing and operations costs low and invest in title development. As of October 1, that will begin to change. Putnam New Media will move to office space in downtown Great Falls, and Popenoe will bring on her first two full-time staff — a director of marketing, Stacy Mosely, formerly in charge of new business development at a New York design agency; and a creative technical director, Will Nicklin, who Popenoe has worked with for years.
New blood, no politics. Neither Mosely nor Nicklin has experience in the world of interactive media publishing. But based on Popenoe’s own experience, she believes those skills can be learned. “I made choices on people who are not involved in the industry based on enthusiasm and guts,” says Popenoe. “People from the existing worlds are fettered: The book industry doesn’t market; the movie and video industries are too full of hype; and the computer industry gets too absorbed in the technology.
“What I want is really open people with vision who can experiment and find models that work in this new world. I am not trying to create the politics of the company but develop titles that users will respond to.”
To that end, Popenoe has inked five CD-ROM development deals with some of the most respected interactive content developers in the business, including Shannon Gilligan, creator of the award-winning title Virtual Murder; Dan Backus, creator and programmer of A.D.A.M., the highly regarded medical reference work; Chipp Walters, a well-known interface designer, who developed interactive projects for NASA, Shell Oil and the San Diego Spurs; Matthew Costello, author of the best-selling CD-ROM title, The Seventh Guest; and Laurie Bauman Arnold and Annie Fox, creators and authors of Putt Putt Joins the Parade, one of the best-selling kids’ titles of 1993.
Matching content with platform. Putnam originally plans to develop content for the Macintosh and MPC platforms, but Popenoe says she is platform-agnostic. The group will distribute its content on whatever the creators deem the most appropriate delivery system, including 3DO, Sega, Nintendo and interactive television systems.
BIG ANTHONY’S BIG LEARNING CURVE
The group’s first release, Big Anthony’s Mixed Up Magic, which we saw in beta, is good — as good as many of the children’s entertainment/education titles we have seen. But it is not a breakthrough title. It suffers from the same problem that many titles based on content developed for another medium suffer from: The linear narrative and the interactivity feel like separate entities when you are playing with the disc.
The work, which is based on longtime Putnam author Tomie dePaola’s book, Strega Nona Meets her Match, was created in conjunction with Berkeley Learning Systems (Laurie Bauman Arnold and Annie Fox, who are now working on their second title for Putnam New Media) and Magnum Design of San Francisco, the company that designed and programmed photojournalist Rick Smolan’s From Alice to Ocean.
Facing limitations. According to Popenoe, development on Big Anthony was a great experience because it made her aware of the challenges ahead of her. “Originally I envisioned a title that would include a world of exploration for kids — taking off from the story,” says Popenoe. “We created a very rich script; it was way too ambitious. We weren’t being as aware of the navigational problems as we needed to be.”
Eventually the title had to be modified but, according to Popenoe, it did not diminish the end product, which she says beta-tested really well with kids. Big Anthony will retail for $69.95.
LEARNING FROM PROTOTYPES AND MARKET RESEARCH
With future titles, Popenoe plans to increase the beta testing cycle to include peer reviews of highly developed prototypes, before a disc ever makes it to Golden Master.
“We are going to create prototypes that are actually a microcosm of the entire title,” says Popenoe, who then plans to show these prototypes to groups of people from various backgrounds. “The assets you create can be used even if the navigation or the narrative path doesn’t work, and at least that way, you have not invested a year developing something that doesn’t work.”
BROADENING THE DISTRIBUTION CHANNELS
Putnam’s primary distribution channels include mail order catalogs, such as the Child Craft Catalog, which prior to the arrival of Putnam New Media only distributed Disney’s and Broderbund’s discs, as well as the computer mail order channel. “Our major channel today remains the software channel,” says Popenoe.
The second channel places Putnam New Media titles into MCA’s consumer electronics channel, which includes record and video stores. Ultimately, Popenoe believes this is Putnam’s biggest market. To that end, she has copyrighted Putnam’s titles instead of licensing the content so that she can quickly offer the titles as rentals, when that channel becomes more established.
According to Popenoe, the least important channel for Putnam New Media includes the bookstores and mass merchandisers. Despite The Putnam Berkley Group’s established reputation in stores such as Toys R Us and Costco, Popenoe believes it will be difficult to build marketing momentum for this channel.
FUTURE PLANS AND THE REALITY OF TODAY
Like so many of the interactive media publishers we have talked with this past year, Putnam has asked those companies and individuals who would place its progress under critical scrutiny to take a wait-and-see approach. In short, Putnam New Media is promising breakthrough entertainment and educational CD-ROM titles beginning in 1994 — titles that will finally generate “the big ah hah” among consumers questing for new thrills.
Whether or not the group can actually deliver on its promise remains to be seen. Certainly, Big Anthony does not meet the criteria, nor is Putnam’s second title likely to be “the one.” After all, “creating a whole new paradigm for how a narrative is told — as Popenoe hopes to do through Putnam — is a tall order, and we imagine it’s going to take a lot of time and experimentation. More importantly, it is going to require original content created specifically for the emerging interactive medium.
According to Popenoe, she has been given the freedom from Putnam’s parents to try to fulfill that vision. MCA and Matsushita have given Putnam New Media a grace period of about a year and a half to show a profit. The parents are allowing for possible losses until the end 1995, but Popenoe expects to be in the black by the end of that year.
“The New Media Group isn’t something I am doing as a little hobby,” she says. “We are going to be a significant player. I have a vision of what we want to do and how to do it, and in the MCA environment there is a place for us.”
Janice Maloney
>BRIEFS
NEWS CORP. BUYS DELPHI INTERNET SERVICES
The Internet, long the domain of researchers, scientists and academics, may soon be host to a new segment of the population — the consumer. One week after Continental Cablevision’s agreement with Performance Systems International to provide access to the Internet via its cable network (see stories, pp. 3 and 17), Rupert Murdoch’s News Corp. announced its intention to acquire Delphi Internet Services, the nation’s fifth largest computer service providing full access to the Internet. The acquisition marks the first time a media company has taken over an online service.
News Corp. says it plans to distribute electronic newspapers and possibly even reference materials, maps and travel guides over the Internet. In the long term, News Corp. says it might use the service as a delivery system for interactive television.
An early project will be to place an electronic version of TV Guide magazine online. Other potential projects include an editor’s forum where subscribers and editors would engage in online dialogs.
The subscriber base for 12-year-old Delphi is fewer than 100,000; however, News Corp. hopes to grow this base with consumer-oriented offerings and the lure of access to the vast banks of information that are available via the Internet.
Delphi’s specialty is simplified access to the Internet, which is notoriously difficult to navigate. A text-driven screen presents catalogs of Internet databases, and other menus are intended to make it easier to locate information available on the Internet. In addition, more than 300 Delphi experts are accessible online to answer questions about where special-interest groups and information can be found.
Russell Williams, VP and general manager of Delphi, claims the company is working on a friendlier graphical user interface that should be deployed in the next six to eight months.
The acquisition is expected to be finalized by the end of September at which time Delphi will be integrated into the News Technology Group — one of two technology groups founded by News Corp. in 1992 to exploit new media opportunities and the company’s growing information and entertainment databases and libraries. Management at Delphi is expected to remain the same and the company will retain its offices in Cambridge, MA.
The News Technology Group, which is headed by Stanley Honey, was founded to consolidate previously independent activities within News Corp. engaged in developing new media technologies. The Technology Group includes Etak, Inc., a leading provider of electronic road maps, and News Datacomm, which handles media access control and encryption for satellite and cable operations. New Electronic Data, the other technology group at News Corp. headed by John Evans, provides electronic versions of the company’s worldwide databases and is developing electronic newspapers. The Technology Group and NED work in collaboration.
News Corp.’s extensive media holdings include newspapers, the Fox television network, book publisher HarperCollins, B Sky B, a satellite television service in Britain, and Star TV, an Asian satellite television service.
NINTENDO/SGI ‘PROJECT REALITY’ IS FAR FROM REAL
Nintendo of America, the Redmond, WA-based video game giant, and Mountain View, CA-based Silicon Graphics Inc., makers of high-end visual computing workstations, recently announced a joint development deal to produce “a next-generation video game player” for Nintendo, code-named Project Reality.
The game machine, which may be either cartridge or CD-ROM based, will be built around SGI’s 64-bit MIPS RISC microprocessor technology, making it capable of delivering photo-realistic 3D images at unprecedented speeds for game machines — and, for that matter, for many personal computers. It is expected to be priced at less than $250. Howard Lincoln, senior vice president of Nintendo, said the player will be released into the home market “with both video games and software products.”
Now, if all of that sounds too good to be true, that’s because it is — at least for now. The first product to be based on the Project Reality technology is not expected to hit the market until late in 1994. It will be a coin-operated video game machine. The home player will not be available until Christmas 1995 — at which time all bets will be off on what can be considered a fast and inexpensive player.
Certainly, Nintendo’s known competitors, Sega and 3DO, are not going to stand idly by during the next year and a half. Already both companies are developing machines that surpass Nintendo’s existing Game Boy, NES and Super NES 16-bit system.
The real big news of this announcement was not the “next-generation systems,” but the deal itself, which took more than nine months to finalize and marks the first time in Nintendo’s history that it has entered into an agreement with a U.S. company.
The hope of the game giant, of course, which has been suffering from eroding marketshare, is that the alliance will provide it with computer graphics technology that will effectively quash its competition. For Silicon Graphics the deal means entrée into the much-sought-after consumer market.
Perhaps the most interesting aspect of the exclusive alliance is that Silicon Graphics will be collecting royalties from Nintendo, not only on the Project Reality hardware but on the software as well. (Pricing information was not disclosed.)
According to Jim Clark, chairman of Silicon Graphics, Nintendo will not be the only recipient of SGI’s advanced microprocessor chip sets (despite an exclusivity deal with Nintendo). Some of the Project Reality technology will find its way into the settop boxes SGI plans to build for the Time Warner interactive cable TV trial in Orlando, FL, as well. (Again, no additional details were available.)
MANUFACTURERS TO SET DIGITAL VCR SPECIFICATIONS
In late September, a group of ten VCR manufacturers will meet in Tokyo to establish hardware and software specifications for consumer digital VCRs. The manufacturers — Hitachi, Sanyo, Sony, Philips Electronics, Matsushita, Mitsubishi, Sharp, Thomson, Toshiba and JVC — hope to identify a common set of specifications that will be embraced as an industry standard for digital VCRs.
VCR manufacturers, motivated by a desire to avoid format wars like the Beta-VHS conflict in the 1980s, have been discussing setting basic standards for more than a year. Earlier agreements between Sony and Matsushita and between Philips and Thomson led to the development of the technical conference, as sponsors are calling the meeting. In an effort to draw further support from the industry, the conference is open to interested parties.
The specifications will ensure that these VCRs will not only be compatible with existing television sets, and able to record the current video formats (NTSC, PAL and SECAM), but will also work with the upcoming HDTV formats, according to the group of manufacturers. Jukka Hamalainen, director of Matsushita’s Applied Research Laboratory, says that it is too early to determine whether digital VCRs will be compatible with digital settop boxes because the companies don’t know what settop boxes will be like. He says this issue will be addressed at the technical conference and more will be known afterwards.
In addition to settop box compatibility, the manufacturers plan to discuss basic specifications, such as video sampling frequencies, tape run speed, video bit rate reduction and video signal recording. Because digital VCRs will be capable of making near-perfect copies from an original source, copyright protection will be a critical issue for discussion.
The tape format will be about half the size of VHS tapes and will record up to 4½ hours on each tape. Unlike discs, the tape format is linear and will not allow for random jumps to specific points in recordings. A camcorder for the format will be developed as well.
Manufacturers have yet to determine the functions to be incorporated into digital VCRs. According to Hamalainen, the biggest factor in this decision is consumer demand. “It’s not a technical question at all,” he says. “It’s a question of what the market wants.”
The manufacturers participating in the conference say the specifications they agree upon will be submitted to the International Electrotechnical Commission, an international standards setting body, for approval. Manufacturers will decide individually whether or not they wish to adopt the specifications.
CONSUMER ELECTRONICS COMPANIES SUPPORT VIDEO CD FORMAT
Matsushita, Philips, Sony and Victor Company of Japan (JVC) recently announced that they have established basic specifications for a CD format that would store and play digital movies. The new format, called Video CD, will store 74 minutes of MPEG-1-quality video on a 5-inch disc.
The proposed Video CD standard is a slightly modified version of Karaoke CD, which was introduced by Philips and JVC in October 1992. The Video CD format will be maintained by Philips, according to Robert Soderbery, director of consumer marketing at C-Cube Microsystems, a company supporting Video CD.
Video CDs will be playback-only discs that will run on Video CD players, computers equipped with CD-ROM drives and MPEG decoders, and audio CD players (with digital data output) that have an add-on Video CD adapter. The discs will not be interactive, but users will be able to jump to marked sections in the CDs. Players will also incorporate functions such as fast forward, rewind and slow motion. Video CD will be compatible with NTSC, SECAM and PAL broadcast standards.
Video CD-only players will be available in the first half of 1994 for less than $300, according to Soderbery. No companies have yet committed to manufacturing these players.
Video CD will be backwards compatible with CD-I, meaning all CD-I players equipped with the FMV digital video cartridge add-ons will play Video CDs, and full-motion CD-I discs will play in Video CD players. In addition, Video CDs will also play in Commodore’s Amiga CD32, a next-generation CDTV-type player introduced in the U.S. this month, and possibly the 3DO Multiplayer. (A spokesperson for 3DO says 3DO favors the format in concept, but a decision will come only after the company reviews the proposed modifications from Philips.)
In this early stage of development, Paramount is the only film company to announce publicly support for the proposed format. By terms of a June agreement between Paramount and Philips, a select number of films from the movie studio will be released for digital video CD-I (which will play in Video CD players). Nine Paramount films as well as four digital music videos from Polygram will be available for CD-I in October, according to Philips.
Eventually, the companies supporting Video CD hope to distribute the format in retail and rental stores such as Blockbuster Video and Tower Video, where the Video CDs would go head to head with VHS tapes and laser discs.
Video CDs are expected to cost less than VHS tapes or laser discs, according to Soderbery. While VHS tapes cost $3.50 to manufacture and sell for around $20 and laser discs sell for around $35, Video CDs will cost less than 75 cents to manufacture and will sell for less than $20, he says.
A deciding factor in whether or not consumers will be wooed to the new format may be the quality it delivers. Video CD relies on an MPEG-1 compression algorithm. MPEG boasts higher resolution capabilities than VHS tape (352 lines of horizontal resolution for MPEG vs. 240 for VHS). However, encoding and compressing digital video is still an inexact science and the quality of video that MPEG compression techniques produce is not consistent. For still-frame applications, Video CD will support higher resolutions of up to 704 lines of horizontal resolution, according to Soderbery.
By contrast, the audio quality on Video CD is high. Audio is compressed 6:1 by an algorithm similar to Philips’s DCC audio compression algorithm and is CD quality, according to Soderbery.
Despite Video CD’s less-than-perfect presentation of digital video, the companies hope that as the first digital format for placing movies on disc, Video CD will be adopted by the industry as a base standard and that future technological advances can be incorporated into the format.
In addition to support by the above-mentioned companies, E-Motion (now a fully owned subsidiary of Sigma Designs), Goldstar and Samsung have announced their intent to support the standard.
INTERACTIVE NETWORK PLANS TO EXPAND NATIONWIDE
Mountain View, CA-based Interactive Network, Inc., is embarking on a nationwide rollout of its interactive system that the company says will allow television viewers to play along with sports and game shows in real time. The 20-hour-a-day entertainment service is expected to be available in Chicago this fall, with additional metropolitan markets expected to be added in the spring and fall of 1994.
IN, whose investors include TeleCommunications, Inc. (17 percent), NBC (11 percent), Gannett (9.1 percent), Cablevision/Rainbow (3 percent) and A.C. Nielson (1 percent), has been operating in Sacramento for more than two years and in the San Francisco Bay Area for more than a year.
The IN system is based on a handheld, wireless unit that does not attach to the television, or necessarily to telephone lines. Robert Brown, VP of engineering at IN, describes the processing unit as similar to a laptop microcomputer with an encryption processor built in “to thwart hackers.”
The unit features a small LCD screen that displays scores and other data. Eight buttons along the side of the screen control most of the action and navigation. The device also comes with a built-in keyboard, which is stored underneath the unit and can be pulled out, for entering data.
Program information is sent to homes via an unused portion of the radio bands of FM stations. The service will also broadcast information on the vertical blanking interval (VBI) of a PBS station for those who live in areas where radio signals are weak. For this type of broadcast, VBI equipment is also required.
IN offers primarily entertainment-based fare. For instance, viewers can join in on a game of Jeopardy!, try to solve a mystery on Murder, She Wrote, participate in an opinion poll on 60 Minutes, or predict the action in a live baseball game. IN runs on average 10 television-based programs and more than 100 other IN games and services from 7 a.m. to 2 p.m. every day.
The IN system relies on software with more than a million lines of patented code and a team of about 20 programmers, or “data jockeys,” as IN refers to them. The data jockeys watch events and shows as they are broadcast and enter information as the action progresses. They work with specially designed software that sends out packetized data to players. Typically two programmers are required to coordinate responses for a live show.
The hand-held device necessary to operate the system, plus six months’ free service, costs $299. Basic service is $15 a month. For an additional $10 monthly fee, players can compete with other subscribers for prizes, such as trips to national sporting events. To do so requires that players hook up the unit to phones lines after the game is over. Scores are downloaded in a 30-second local phone call. They are processed at IN’s central facility and then broadcast to participating players.
IN isn’t offering consumers anywhere near the sophisticated level of interactivity promised by large media companies such as Time Warner or Viacom. Nor is the initial cost of $299 a small investment for such a limited system. But the company claims there is a real demand for its brand of interactive television. In California, the company says its 3,000-plus subscribers give the service a 92 percent satisfaction rating.
IN says its business isn’t limited to what it is delivering in the way of interactivity today. The company says it’s talking to cable companies about integrating IN capabilities into digital settop boxes.
“We plan to be there when settop boxes come out,” says Brown. “By adding a card with our security, we can come into that box for a very small incremental fee.”
DISCOVERY TO FIELD TEST YOUR CHOICE TV IN EIGHT U.S. CITIES
Yet another entrant in the growing interactive television arena, Your Choice TV, Inc., a subsidiary of Discovery Communications, Inc., recently announced it will begin field tests of its interactive television technology in eight cable systems this fall. Your Choice TV will allow more than 20,000 cable subscribers to order broadcast and cable television shows after their first run on TV.
Your Choice TV will function similarly to a pay-per-view service. Consumers will select programming from an on-screen menu of up to 40 programming options. Programs are available at set times (i.e., every half hour or hour) on dedicated channels on the cable system. Shows will appear on Your Choice TV the day after they first run on broadcast or cable networks and will be available for one week.
The service will be a “bestsellers’ rack of television,” says Jim Boyle, spokesperson for Discovery. It will not be entirely ratings driven, however. For example, Saturday Night Live may be a selection even though it’s not in the Nielsen top ten.
The cost for programs will range from 50 cents to $2, according to Boyle. “One dollar is a magic figure for us,” he says. “Television shows are kind of disposable. If the cost is sort of pocket change, [consumers] perceive it as not that big a deal.” All profits from the test will be donated to charity. When the system rolls out, programmers will receive royalties on a per-order basis.
The field tests of Your Choice TV are decidedly low-tech, with shows being shipped overnight from programmers to individual cable stations for rebroadcast. Subscribers’ homes are equipped with addressable analog settop boxes that will allow customers to order Your Choice TV shows via remote control. Discovery says the field tests are not intended to test the feasibility of the service technically, but to test consumer reactions and demand.
Discovery plans to roll out a digital system in 1994 after digital converter boxes are available. At this time, the company hopes to deliver compressed video signals to cable headends via satellite.
Discovery, whose shareholders include Tele-Communications, Inc. (49 percent), Cox Cable Communications (24 percent), Newhouse Broadcasting (24 percent) and John Hendricks, Discovery founder and chairman (3 percent), launched Your Choice TV in March after conducting focus-group testing in which it found “a fundamental consumer dissatisfaction with television’s inability to break out of the linear viewing model.” Its research also found that consumers would be willing to spend more than $20 a month for the offerings on Your Choice TV.
The test will begin on October 18 in West Palm Beach, FL. Additional tests will commence between November 1993 and April 1994 in Chicago, IL; Columbus, OH; Dayton, OH; Nassau County, NY; San Diego County, CA; and Syracuse, NY.
Cable companies participating in the test include Comcast Corp., Tele-Communications, Inc., Time Warner Cable, Continental Cablevision, Inc., Cablevision Systems Corp., Times Mirror Cable Television and NewChannels Corp.
Discovery has not announced companies which are supplying programming for the test, but says they include both broadcast and cable networks.
NAUTILUS CD-ROM MAGAZINE HITS 10,000 SUBSCRIBERS
While mainstream publications such as Time, Newsweek and BusinessWeek are making a big splash with their forays into the electronic publishing arena, Nautilus, the first monthly CD-ROM magazine, has quietly been building a business. Dublin, OH-based Metatec Corp., publisher of Nautilus, recently announced the multimedia magazine passed the 10,000 subscriber mark.
Subscriptions for the 3½-year-old magazine on multimedia have risen 60 percent since July 1992. Managing editor Mike Espindle attributes this increase to the consumer acceptance of CD-ROM and the fact that Nautilus is the only monthly publication targeted directly to CD-ROM owners.
The electronic publication also has a large following overseas. Approximately 48 percent of its subscribers are outside of North America, with the heaviest concentration in Japan and western Europe, especially Germany. “I think it points to the global market penetration of CD-ROM drives,” says Espindle. “I think it also points to the unreliability of telecommunications. It’s hard for people in the Netherlands to log on to Compuserve because of the phone lines.”
Espindle sees demand for CD-ROM drives and titles outpacing online services. “The population of CD-ROM drive owners will be, if it’s not already, much larger than the population that telecommunicates,” he says. Nonetheless, the company is covering all its bets and is exploring hybrid online-CD-ROM services.
Each issue of Nautilus contains five content sections: industry watch, desktop media, software and tools, entertainment, and education. Industry watch covers product information and approximately 500 stories from the news wire every month. Desktop media includes articles on topics such as digital imaging, MIDI files of performances, and QuickTime videos. Software and tools lets subscribers sample some of the latest software releases and includes anti-virus programs and system upgrades. The entertainment section includes games and CD-quality audio recordings. Education features demonstrations of health and fitness software, HyperCard stacks on nature topics, and the Home & School Mac magazine.
The magazine is subscriber-supported and accepts no advertising. Espindle says it has future plans to incorporate ads, but this will require an additional marketing effort by the company.
Although early technology adopters form the core of its subscribers, Espindle says increasingly its subscribers are “normal” computer users. “People who are using us are not necessarily techies anymore,” he says. As a result the content is being shifted to have a “broader appeal.” More samples of consumer titles and interactive tutorials of technology will be included in future discs.
Annual subscriptions (12 issues) for both the Macintosh and Windows versions of Nautilus are $137 in the U.S. and $222 internationally.
SIGMA TO DELIVER MPEG DECODER BOARD FOR PCS
Sigma Designs, a cross-platform hardware manufacturer located in Fremont, CA, recently announced its plans to distribute an MPEG decompression board for IBM PCs and compatibles. ReelMagic, as the board is called, is expected to deliver full-screen, full-motion video and CD-quality audio playback off a single-speed CD-ROM drive — for less than $500.
According to Sigma, the board is for consumers of “next-generation” entertainment and interactive learning software. In other words, in order for consumers to take advantage of the board’s capabilities, they must be using interactive software that has been developed using MPEG-1 digital video compression technology.
The first titles to take advantage of the full-motion compression scheme are expected to appear on the market this fall. When the ReelMagic board is shipped this November, more than 12 compatible titles are expected to be released, with a total of 25 titles expected to be available by year’s end, according to Sigma. Activision’s upcoming Return to Zork will be bundled with the board.
In addition to Activision, some of the biggest players in the game industry, including Interplay Productions, Aris, Fathom Pictures, ICOM Simulations, Sierra Online, Trilobyte and Psygnosis, have committed to working with Sigma to build game titles using MPEG-compression and decompression techniques.
ReelMagic is also being tapped as a playback controller for the newly proposed Video CD format (see Video CD brief, above).
The ReelMagic technology includes support for Microsoft Windows 3.1 as well as DOS 5.0. It comes with a VGA feature connector, so it can display 32,768 colors — at a resolution of 800 by 600 on non-interlaced displays and 1024 by 768 interlaced — on even a basic 16-color VGA card.
ReelMagic is based on graphics and MPEG video and audio decompression techniques that were developed at Fremont, CA-based E-Motion Inc., which is now a fully owned subsidiary of Sigma.
VYVX SIGNS LOCAL ACCESS AGREEMENTS
Vyvx, a nationwide fiber-optic television service founded in 1990, has been making inroads into local markets and Hollywood with a string of recent agreements with cable operators and production studios. Tulsa, OK-based Vyvx employs a 30,000-mile fiber-optic network owned and operated by its parent company, WilTel. Although AT&T, Sprint and MCI also operate nationwide fiber-optic networks, Vyvx is the only one dedicated to business.
Two of Vyvx’s recent deals are local access pacts with FIBRCOM, a subsidiary of San Antonio-based cable operator KBLCOM Inc., and Cox Cable Oklahoma City. The agreements allow for FIBRCOM and Cox to provide first- and last-mile service connections within metropolitan San Antonio and Oklahoma City, respectively.
End users of these systems, including news organizations, businesses and video production facilities, will be able to utilize video services and applications, such as the transmission of news and sports, videoconferencing and remote online editing. Both one-way and two-way service connections and digital and analog transmission capabilities will be provided by the agreement. (With the exception of certain local access agreements, Vyvx employs analog first- and last-mile service connections.)
Vyvx, through its service division for production facilities, called First Video, has also signed a number of recent agreements with video production and stock image houses, including Industrial Light & Magic and The Image Bank. The 30 production houses that are connected to the network are able to transmit video such as commercials, news features, video imaging, video graphics, interactive videoconferences and other programming in real time to other First Video affiliates or any other facility connected to the system. Remote online editing can also be conducted between multiple sites.
During work on Jurassic Park, special effects company Industrial Light & Magic and Steven Spielberg’s film studio Amblin Entertainment used the system to shuttle computer-generated dinosaurs and live film footage back and forth from ILM in San Rafael, CA, and Amblin in Los Angeles.
The Image Bank, one of the world’s largest stock footage agencies, also recently came online with First Video. First Video affiliates under special agreements with The Image Bank and its licensees may review available video stock footage, request transmission of the stock and tape the requested footage at a First Video affiliate facility. The Image Bank also supplies a high-speed film search software program.
The WilTel network is designed with a DS-3 backbone that transmits 45 million bits per second. The DS-3 platform, together with advanced codecs, provides broadcast-quality NTSC television signals over fiber optics. Vyvx says its switched nationwide network reaches 55 metropolitan markets. More than 500,000 individual status and system alarms are monitored at all times to prevent failure and keep the system at 99.999 percent availability, according to the company.
In addition to the above agreements, Vyvx has long-standing agreements with companies including ABC, CBS, CNN, Fox and NBC for fiber-optic television transmission services and Teleport and MFS Communications for alternative access in local markets.
“In the past we’ve worked with just about everybody,” says Len D’Eramo, a spokesperson for WilTel, “and we will continue to do so.” D’Eramo also said the company had “had some trouble doing deals with telcos” and is now actively seeking to build relationships in the cable community. “We’ve found cable a nice match. We speak the same language.”
ADOBE PREMIERE 1.0 FOR WINDOWS
Adobe Systems of Mountain View, CA, recently released its highly regarded Premiere digital video-editing software for the Windows platform. The software, which is a scaled-down version of the company’s video-editing tool for the Macintosh, is targeted toward developers of corporate interactive training modules or first-time users of digital video.
Premiere for Windows is almost indistinguishable from its Macintosh predecessor in interface design. Still present are all of the transition effects, plug-in filter capabilities, and Adobe Photoshop and Illustrator compatibility (for image manipulation and importing graphics files, respectively).
This version also supports files from the major PC-based software applications and file formats, such as Autodesk Animator files; AIFF and WAV sound formats; and PCX, TIFF, BMP and DIB graphics formats. In addition, it is able to import and export files in Microsoft’s Audio-Video Interleaved (AVI) format as well as the Apple QuickTime format, giving digital video editors their choice of playback platforms. (For more details on the AVI and QuickTime formats, see Vol. 2, No. 6, p. 19.)
According to Adobe, version 1.0 for Windows has most of the basic features found in version 2.0 for the Macintosh. Since it is geared toward the non-professional video market, however, the software lacks the capability to create edit decision lists or do motion control, device control and titling. Of these features, titling and motion control will be the first to be integrated into the next release. Adobe is unsure when the two different versions will attain functional parity.
Adobe is pricing the Windows version far below its Mac counterpart: $295, as opposed to the $695 price tag set for its Macintosh tool. Most people, however, will probably get their software in bundling deals with video capture and compression boards that will be released this fall and early next year. This same strategy was very effectively implemented for the Macintosh market, and rapidly fixed Premiere as the premier tool (pun intended) for digital video editing.
The real question is whether or not the PC platform is sophisticated enough to win over people interested in digital video production. The hardware upgrade kits for multimedia (even just playback) have been extremely difficult to install and use, although they are getting much better. (Apple has even joined the fray, announcing this month its CD Multimedia Kit for PCs, which it developed in conjunction with Media Vision of Fremont, CA.)
It remains to be seen whether the new video boards and the Pentium-based systems will be powerful enough, and have enough graphics processing available, to sway developers. At least the software now exists to begin experimenting.
>I/O: READERS RESPOND
BALKANIZATION OF INFORMATION
Should we form a ‘Corporation for Public Cybercasting’?
Author Tom Grundner is president of the nonprofit National Public Telecomputing Network, which has its origins in a series of research projects conducted at Case Western Reserve University in Cleveland in the mid-1980s. Grundner, then at CWRU’s Department of Family Medicine, set up a single computerized phone system where people could call in on their computers, leave medical questions and have them answered by a certified physician. The success of “St. Silicon’s Hospital and Information Dispensary” led to the formation of the Cleveland FreeNet — now a network of 13 systems. NPTN continues to grow based on its dedication to community computing as a civic utility.
At the moment the entry of the United States into the Information Age is in disarray — particularly with regard to the development of public interest/public access information systems. What passes for “development” consists of a series of single-interest groups, each attempting to elbow the others out of the way in a competition for very limited financial resources. It is a zero-sum game in which someone (indeed, almost everyone) must lose.
K–12 network enthusiasts are pitted against librarians, who are pitted against health educators, vs. community computer developers, vs. government information providers, vs. senior citizen programs, vs. rural networking programs, vs. inner-city networks… and on, and on. If we have any hope of entering the Information Age with any semblance of equity, this must end.
One of the main reasons for this fragmentation is because, unlike other fields of community development, there is no unified mechanism for funding this kind of work. We do not “fit the existing priorities” of institutions ranging from government agencies, to foundations, to corporate donation offices. Some have expressed hope that this might change with the passage of the National Research and Education Network, or NREN, legislation. I believe that hope is unfounded.
THE EMPEROR HAS FEW CLOTHES
The fact is the NREN legislation, as it is now constituted, contains no provisions for the development of community-based computerized information and communications systems. It contains no provisions that would allow the people who are supposed to pay for this network with their tax dollars to achieve any direct benefit from it. This, in turn, undermines the major rationale for the development of the NREN at all. Indeed, without a parallel development of community computers, the NREN makes little sense.
The NREN legislation carries credibility primarily because of the
“E” in its name — especially if K–12 schools are included in the mix. Even here, the bill falls short.
What is the point of creating a national education network — of training kids on electronic mail, information access, etc., and then cutting them off the instant they graduate? It is like having mandatory driver’s education in a world without cars, or at least in a world in which cars are driven only by a handful of the demographically elite.
We need an NCON. Perhaps what is needed is not an NREN but an NCON — a National COmmunity Network. A concept that would include researchers and educators but would also include the library community, and government information dissemination, and the health education community, and the senior citizen networks, and the small and medium-sized business community, and other aspects of our society that can benefit from the developments of the Information Age.
By so doing, the concept of research is extended. A “researcher” is not necessarily limited to scientists who need easy access to supercomputers. It includes them, but extends the concept to anyone who needs information for any purpose — from a small business owner who needs the most recent economic data, to a parent who needs access to information about her child’s illness.
By so doing, the concept of education is extended. A “learner” is not necessarily limited to being enrolled in a high school or college program. It includes them, but extends the concept to anyone, anywhere, at any age, at any time, who wishes to learn and needs access to resources to do that.
In the absence of a systematic plan for the development of community computing; in the absence of a plan that would responsibly extend at least some of the benefits of a national network to the people who are being asked to pay for it — the NREN makes no sense.
An alternative model. On the other hand, suppose we could find a way to bring all of those competing interests together under one conceptual roof? Suppose we could create a funding vehicle that would systematically support the development of community computers, and provide money for the development of K–12 programs, and library programs, and rural programs, and urban programs, and senior citizen programs? Suppose we could create a situation that would allow the NREN to benefit all citizens. Is there a model for such a solution? I believe there is — that of the Corporation for Public Broadcasting (CPB).
The CPB is a nonprofit corporation, created by federal law, which receives its core funding from the federal government — but is not an agency of the federal government. The board of directors is appointed by the president of the United States, but he may not have more than half of the board composed of members of any one political party. Their job is to promote the development of public radio and public television in cities and towns throughout the United States. They do this by supporting the building of stations (along with the NTIA) and by providing high-quality, national-scope, programming.
I am wondering if perhaps this new medium doesn’t deserve at least the same consideration as has been received by radio and TV. I am wondering if perhaps it isn’t time to create a “Corporation for Public Cybercasting” (CPC) along the same lines as CPB.
THE CORPORATION FOR PUBLIC CYBERCASTING
The CPC would be a nonprofit corporation, created by federal law, with a board appointed by the president of the United States, which receives its core funding from the federal government — but would not be an agency of the federal government — just as the CPB is now.
It could be created either as part of the current NREN legislation, or in a separate bill, and its purpose would be threefold:
• It would help establish and operate free public-access community computer systems in cities and towns throughout the U.S.; and to link them into a common national network via the NREN. This would include initial and ongoing core funding for equipment and personnel costs — just as the CPB and NTIA does now for PBS and NPR.
• It would develop and deliver across this network high-quality, national-scope information services to supplement what each community is able to develop on its own — just as the CPB does now for PBS and NPR.
• It would develop special programs to introduce telecomputing to the general public with special emphasis on K–12 students and teachers, senior citizens, the handicapped, women and minority populations; and to develop this medium with special regard to community service applications and government connectivity — just as the CPB does now for PBS and NPR.
In addition, the CPC would have limited but guaranteed free access to the NREN or any other network that is created or supported in whole or in part with taxpayer funds.
The CPC would meet the criteria we set up earlier. It would provide a unified home for all the scattered groups that are now out there. It would give each member of Congress a reason to vote for the NREN; namely, that it will directly benefit all of their constituents. And it opens at least some of the benefits of the network to everyone from kids to senior citizens; from colleges, to corporations, to community groups.
But a question still remains: How are we going to pay for it?
THE COST OF A COMMUNITY NETWORK
This national network of community computer systems would be funded via a federal/state/local partnership program involving a series of two-to-one matching grants.
For any given community computer system, the CPC would match $2 for every $1 raised at the state level, up to a limit of $100,000 per system for core funding and $50,000 for educational and special program development. The state government would match $2 for every $1 raised at the local level up to a limit of $50,000 for core funding and $25,000 for educational and special program development. Thus the maximum amounts for any given system would look like this:
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Max/
Federal State Local System
Core Support $100,000 $50,000 $25,000 $175,000
Special Pgms 50,000 25,000 12,500 87,500
Total Exposure 150,000 75,000 37,500 262,500
For example, at the federal level, to bring at least one community computer to each of 100 cities (e.g., 50 largest cities in the U.S., plus each of the state capitals), would entail a maximum exposure of $15 million per year. An additional $1 million per year would be needed to support CPC core staff and functions. Thus a $16 million total would make computerized information and communications services accessible to the bulk of our citizenry, and place us on a path of no return with regard to the Information Age.
At the state level, to use Ohio as an example, to put a fully funded community computer into each of Ohio’s seven major cities (covering well over 50 percent of the state’s population) would cost the state $525,000 per year.
Matching funding at the local level would occur via city/county government funding, private donations, grantsmanship, user solicitations, and so forth.
(I am using “largest cities” as a selection criterion here only for purposes of illustration. Selection could be made via any number of factors, such as geography, rural/urban mix, etc.)
Additional monies could and would be raised by both the CPC and the individual affiliates — just as NPR and PBS stations do now — which would allow an individual system to do more innovative things than what might be allowed by just the core funding alone.
The one thing that is certain is that the concept of community computing is not going to go away. There is no way I can imagine a 21st Century in which we do not have free public-access community computer systems, just like our century had the free public library. The question is no longer “whether,” the only question is “when.”
Your support for developing a Corporation for Public Cybercasting will go a long way toward making that day arrive sooner rather than later.
For more information on CPC, call Project Startide, Box 1987, Cleveland, OH 44106. E-mail to startide@nptn.org. (216) 247-5800, fax (216) 247-3328. Though written by Tom Grundner, president of the National Public Telecomputing Network, it does not necessarily represent the views of any particular NPTN affiliate or organizing committee.
>EVENT
THE WESTERN SHOW
Dec. 1–3, Anaheim, CA
California Cable Television Association
(510) 428-2225, fax (510) 420-9010
“Definitely not business as usual” is an apt theme for this 26th annual conference. With massive changes afoot in the cable industry, hot topics are sure to include the recent ruling allowing Bell Atlantic to send video over its telephone network, the Cable Act, interactive technologies and programming, and digital settop boxes.
The conference program will include concurrent sessions in the areas of operations, marketing, technology, programming, public and governmental affairs, finance, new revenue streams and international cable.
Sessions on operations will cover a small system operator’s guide to the universe, cash flow, re-regulation, investors and refocusing operations.
Marketing panels will look at how technology and digital boxes will change system structures, customer billing procedures and marketing, as well as other issues such as maintaining customer brand loyalty and attracting minority audiences.
Topics such as packaging 500 channels, the relationship of broadcasting and cable, increasing revenue through spot advertising, pay-per-view’s potential, and cable and education will be featured.
Public and governmental affairs sessions will discuss the balancing of re-regulation, new technology and competition. Sessions on international cable will look at partnerships and operating overseas as well as programming for a global audience.
Technology sessions will discuss cable in a multimedia environment, the realities of a 500-channel environment, two-way telecommunications services, public policy, and technical and marketing implications. In addition to the technology program within the conference track, the Society of Cable Television Engineers in cooperation with the Western Show will present three days of special sessions on key technical issues, such as the new FCC rules, fiber optics and digital compression.
An exhibition center will feature products and demonstrations from more than 300 hardware suppliers, programmers and multimedia companies. The international attendance to the show is expected to exceed 10,000.
Amy Johns
-30-