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  1. Technology
November 7, 1994


By CBR Staff Writer

A recent report from Inteco Inc entitled Multimedia in the Home has concluded – as we did here in May (CI No 2,419) that the personal computer, rather than the television set, will be the likely focus for multimedia services in the home and that those services that people will be most ready to pay hard cash for are likely to be those centred on the personal computer. Furthermore the information superhighway will not happen until the next millenium and those companies pumping millions into the infrastructure to support it and new services such as video-on-demand are likely to lose their bets and a lot of money in the short term. Has this news come as a body blow for the fledgling company Online Media Ltd, set up in July to develop and sell television based set-top boxes for video on demand and other such services on the information superhighway? Apparently not. The subsidiary of Acorn Computers Plc based in Cambridge in the UK, remains decidedly unflapped. Schools Malcolm Bird, chief executive, believes that some of the report’s findings fail to stand up to scrutiny while others actually support Online’s position. To his mind the conclusion that video-on-demand will not attract people into multimedia services is undermined by another Inteco finding that movies, sports and education are the motivators that will lead people to buy multimedia services. As Bird points out, what is video-on-demand if not movies? Indeed with Acorn’s prominent role in education software and the presence of education on Online’s set-top box, Bird is positively buoyed by this aspect of the report. The Cabling Association has also recently agreed that where cabling passes schools, the school will be connected to the network without charge – so that the kids will go home and demand that their parents sign up for what they have seen on the system during break at school, no doubt. Schools will be able to exploit the education capabilities of Online’s offering and pupils can carry on using the system at home. As each member of the family can have his own identification number, access to elements of a particular programme could be restricted by the teacher or according to the timetabling of the National Curriculum, ensuring a child focuses on a certain area. Inteco also found that other applications such as on-line information services and home shopping interest consumers and could bring in additional revenues, but are unlikely to prompt people into the initial subscription. The success of home shopping in the US and the short amount of time that it has been available in Europe makes any conclusions about it difficult in either direction. Furthermore, if the set-top box is supplied free as part of the subscription deal by the network provider, and Online is currently in discussions about this form of distribution, people attracted to the network for one service are more likely to use others. Online is also talking with satellite service providers about using the box as the front end to satellite broadcasts, though traffic would be only one way. The report’s apparently clear conclusion that the personal computer not the television will be the preferred vehicle in the future and the implied distinction is not that simple. Current televisions have processors, memory and are programmable. Are these computers? The set-top box used in the British Telecommunications Plc trial in Martlesham was a stripped-down Apple Computer Inc Quadra, and one of Online’s set top boxes has a CD-ROM and will have the capability to have a keyboard added, if required. By David Johnson Are these personal computers? Surely the future vehicle will be a hybrid of both, combining the ease of use and picture quality of the television with capability to plug in a keyboard and have a personal computer? Families are not going to sit round a 14 monitor to watch movies or the football, especially if they have a 20 television available. The report identifies the group most likely to embrace multimedia in the UK as the active, relatively high income family with children in secondary educa

tion. Of these 63% already have personal computers – ergo personal computers are the way forward. Bird agrees that this group is likely to embrace multimedia first because it has already accepted technology and is aware of the potential. However this section represents only part of the country. And whereas 63% of this group has personal computers nearly all of this group and the UK has at least one television, and many of these people remain unaware of multimedia. Two or three television sets in a household is common, two or three personal computers is a personal computer vendor’s dream, but rarely a reality, and by the year 2000 Inteco expects under 50% of households to have personal computers. Bird parallels this situation to the rise of the video recorder – 15 years ago only a very small percentage of the country had a video recorder, and few others could see the need. According to Inteco’s own research, 74% of 22m households in the UK now have videos. Bird believes that people have not experienced multimedia enough or seen the potential of set-top boxes to decide if they are needed. The report believes that the market for Sega Enterprises Ltd and Nintendo Co drives will at best flatten as the personal computer takes an increasingly large share. Bird counters that his set-top box offers this capability and a variety of ways of paying – pay per play; pay per month; unlimited play of a particular game including upgrades or purchase the game outright and have it sent on a CD-ROM. Because of the network, users will be able to play against friends, or maybe in a tournament. This could prove an attractive option for games developers as it may offer a more secure arena for their products, with copying harder as the game remains in the hands of the content provider. World showplace However the biggest potential stumbling block facing video-on-demand and the like is, according to Bird, not customer apathy but the standards for content providers. He believes that the industry will shoot itself in the foot if it allows incompatible standards to develop for different networks or different services. He wants a ‘neutral’ standard to be set, so all information is translated as necessary by the system software on the set-top box and points to the series of trials being set up by Deutsche Bundespost Telekom. Trials will take place in several different German cities using different network, service, equipment and content providers, and different technologies and different billing systems. However, Deutsche Telekom has stipulated that all the networks must be capable of seamless integration in the future. This, Bird believes, is an advantage Europe enjoys over the US, where a large number of incompatible legacy networks is proving a headache. With its levels of deregulation, Inteco believes the UK has the opportunity to be the world showplace for video-on-demand. But whereas the reports suggests that cable companies should go back to the drawing board or risk disaster, Bird reckons that the set-top box is the way forward.

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