A New Medium for the Millennium

Once upon a time, in an era before Atari, households throughout the country switched off their radios and turned on a newfangled box called the television set. After years of listening to radio programs that basically comprised actors standing in front of a microphone before a live audience, an orchestra in the background and sound effects generated by people in the wings, the American public clicked on their much-anticipated TV sets to see actors standing in front of a microphone before a live audience, with an orchestra in the background and sound effects created by people in the wings.

Over time, however, programming evolved, aided by the skyrocketing popularity of the TV set, the cash infusion by advertisers and the development of TV networks. TV shows started to incorporate content that best leveraged the new medium.

More than 50 years later, a similar phenomenon is happening on-line, as the Internet gets a shot in the arm with the advent of high-speed access devices such as cable modems. The question is if and when content providers will emerge to meet the challenge.

The Internet has limits and problems that early developers of TV programming never imagined. For one thing, cable modems may boost the speed at which users can access the Internet, but the Internet itself remains an unruly tangle of networks, any one of which can create a bottleneck that slows the entire system.

"The Internet as a network is only as strong as its weakest link," says Jason Douglas, group product manager for Pointcast. "You can increase the size of certain parts of the pipe, but you won't necessarily increase the size of the pipe overall.

The end user's personal computer can also create a bottleneck, says Sean Callahan, vice president and executive producer at the Excalibur Group, the new business development division of Time Warner Cable.

"The gating factor is the level of sophistication of the user's PC," Callahan says. "How fast is the processing chip, and how much memory does it have? It does no good to build a whizzy site with 10-minute video clips if the bus on the user's PC cannot absorb more than 2 Mbytes of data.

Faced with cable modems' dizzying speeds, multiple systems operators need to balance the jazzy new content with customer expectations and limitations.

"Most cable customers are not Net heads, and we need to manage the expectations of the user who may have read all about cable modems without realizing that their computer can't handle those speeds, or that the Internet itself could slow things down," Callahan says.

On the flip side, content providers are reluctant to invest in developing content optimized for high-speed access because of the limitations and the relatively slow pace of cable modem rollouts.

"In the broadband space, you need a critical mass of audience before providers will be willing to spend the money to create new forms of programming," says Charles Moldow, vice president of media development of @Home Networks.

As a result, the first few years of cable modem services will incorporate content somewhere between a faster version of the same old stuff and funky, Jetson-like services, industry experts agree. Many content and service providers are likely to step back initially and let consumers lead the way.

While much of the cable modem hype is directed at the residential market, some corporate applications already exist. Nashua, N.H.-based Spike Technologies, for example, is using cable modem technology with its multichannel, multipoint distribution service network to provide corporations with Internet access and outsourcing services such as remote help desks, file backups and remote data farming.

"Cable modems allow us to provide a whole range of services that everyone has dreamed about," says Mike Bouchard, chief network integration scientist at Spike. "It enables traditional in-house services to become remote, which can save money.

Another near-term application is likely to be telecommuting, letting users take advantage of services such as videoconferencing, whiteboarding and application sharing with their corporate offices from their homes.

"With enough bandwidth, you can do videoconferencing in conjunction with sharing documents, and that data collaboration part is important for applications like telecommuting," says Oren Aeril, chief technology officer at VDONet.

Users can extend that capability to recreation, even though the cost of equipment and services over regular telephone lines prohibits videoconferencing for residential use today.

"With cable modems, the average person who just wants to call his family across the continent can get the experience of videoconferencing without too much jitter or jerkiness," he says.

Aeril also sees companies taking advantage of high-speed access to incorporate videoconferencing and teleconferencing into their Web sites, citing Internet commerce as an example.

"Let's say you're shopping on the Web for a certain product, such as a travel package," he says. "If you're looking through the site and you have a question, you can just click somewhere on the page and you're connected to an agent who can take you on a guided tour across the Web pages and answer your questions.

A company can also incorporate video into the Web page, allowing the user to view a video clip or tour a certain location, Aeril says.

This integration of video clips into Web sites is likely to be an important first step toward tomorrow's high-speed multimedia content, says Rafe Needleman, editor of CNET.Com, a division of media company CNET: The Computer Network.

"Some combination of live video with the interactive stuff on the Web is definitely the way to go," Needleman says.

The novelty factor of viewing superior-quality, full-motion video over the PC is likely to keep users happy for some time, giving the edge to content providers that already have video programming that can be re-purposed, says @Home's Moldow.

"You can already get video clips on the CNN site," Moldow says. "If you're a 28.8 [kb/s modem] user, that's pretty painful, downloading that clip for 20 minutes and watching it for 10 seconds. But if you provide it over higher bandwidth, then you immediately get a much better video and audio signal. That notion can take us quite a ways.

If this turns out to be the case, programmers such as CNN and ESPN are likely to be the first to provide high-speed multimedia Web content, at the expense of the print-based media that have dominated the Internet until now, Moldow says.

"For the last three years, companies that are primarily text-based have been re-purposing their content for the Internet and have gotten broad distribution," he says. "Companies with more multimedia assets such as cable and broadcasting networks have been frustrated in the narrowband environment, seeing the print guys taking over, but cable modems will let that community of content providers better exploit their assets.

Crossing the line Whether the TV and the PC will converge is an entirely different topic, but most industry experts agree that the two will overlap with the advent of high-speed Internet access.

For example, high-speed access to the PC means that broadcast and cable programmers have a way to use their material that doesn't make it to the TV set.

"NBC shoots an enormous amount of video every day, and very little of it is actually used," says Steven Johnson, senior producer at MSNBC, the Microsoft/NBC joint venture. "Cable modems could mean that the things that can't be done on the nightly news or on cable can be accessed on our Web site. For example, we could air a two-minute piece with highlights of a press conference, and say, 'If you want the whole thing, go to the Web for it.'"

Advertising is another natural fit for convergence. High-speed broadband access could infuse the Web with cash, says Phil Corman, U.S. manager for broadband and interactive systems at Mitsubishi Electronics.

"Television advertising is around $45 billion a year," Corman says. "The [Internet] now only has a couple hundred million in advertising revenues, but we think that with broadband access, the big advertising money can be funneled into the Web.

For example, if a viewer is interested in a car commercial on TV, he can either click a button on his Internet TV appliance or call up a Web page on his TV and receive subsequent data on the product, a listing of dealers in his area, discount coupons and other information. And the advertiser now has the name, address and e-mail address of a potential customer.

That is not the only way that advertisers can leverage their direct link to the consumer, Corman says. High-speed access gives them a way to essentially trade jazzy applications for user information.

A consumer could be watching a baseball game on television, for example, and be intrigued by a notice for a game of interactive rotisserie baseball on the Web, sponsored by an advertiser, that is free if the user fills out an informational survey or watches a few ads on the Web between innings.

"Once you sign up for that game, advertisers can push data down at you, and that attracts that $45 million in advertising to this new concept," Corman says. "If advertisers see consumers adopting these things, that will draw them, since all advertisers care about is eyeballs."

The strategy is not limited to sports and interactive games. An advertiser on a popular television show could sponsor a Web site for that show, providing users with merchandise, chat rooms and statistics in exchange for customer information.

These ideas are consistent with what people are already doing on the Web, Corman says. "If you're watching baseball, you're probably already a statistic freak and want to see additional information on players. If you watch a soap opera, you probably are interested in a chat room about your show. It's using the Web to build a sense of community.

Where do we go from here? Eventually, consumers will tire of getting the same old thing, only faster, and start clamoring for new and different applications, industry experts agree. The questions are, what will those applications be and who will provide them?

"[Development of this content] requires innovative people who feel passionate about what they're doing, and it's going to take visionaries to drive this and create new markets," says @Home's Moldow. "When Ted Turner started, everyone thought he was crazy, and look at CNN now.

Unfortunately, developing such multimedia products doesn't come cheaply, and smaller content providers with great ideas often fall by the wayside because of lack of funds. One such content developer, Music Pen, has found a solution. The New York-based company is receiving financial backing from Time Warner to create Incrediville, a kids' on-line community for the Road Runner service.

Developing compelling multimedia content for children is particularly challenging, says Yee-Ping Wu, president and chief executive officer of Music Pen.

"To capture kids' attention, we need to do a lot of thinking," Wu says. "We're competing with video games, TV programs, toys. We marvel over bandwidth, but kids don't care how cool technology is. All they care about is whether they're having fun.

Music Pen's answer to that dilemma is a cartoon town that incorporates interactive games, animation, music and sports. For example, Noise Now is a music laboratory that lets kids pick out instruments, characters and toys to assemble their own band, select soundtracks and stage concerts. Another Incrediville activity, Action Alley, lets kids play a variety of multimedia games such as Bummy Mummy, Archer's Quest and Spy Der, each of which is different every time the game is played.

"The broadband area has tremendous potential," Wu says. "It takes all the good things of various different platforms, such as CD-ROMs, the Internet world, the social aspect of games-whether they're single-player or multiplayer-and allows us to combine all of that into one place.

Multimedia content for kids is also an important part of soon-to-be-renamed Continental Cablevision's Highway1 cable modem service in Jacksonville, Fla. Continental has incorporated a kids corner called the Cool Cats Club, into its Jacksonville Jaguars Web site, says Audra Kalench, regional content manager for Continental. Kids can watch and listen to Jaguars team members read books and follow along with the text.

The Jaguars site can be accessed by both dialup and cable modems, but much of the site's content-such as video clips of the players, a stadium tour that offers a 360-degree view and the capability to follow the game's plays with Xs and Os-is optimized for high speeds.

The Web site also includes a music offering called the Jacksonville Jukebox, which lets cable modem subscribers click onto a jukebox interface to listen to CD-quality music from local bands.

"Music over a 28.8 [kb/s] modem compared to music over a cable modem sounds like cheap AM radio vs. a CD," says David Del Beccaro, president and chief executive officer of Music Choice, a music service targeted toward cable operators and direct broadcast satellite carriers.

A different kind of superhighway Even multimedia content developers admit that they have no idea what will emerge over the next few years, as cable modems reach a critical mass.

"The migration path isn't so obvious, and it's going to take some experimenting," says @Home's Moldow. "Maybe the driver will involve embedding HTML within video so it's linkable to other video. Maybe animation will be a big driver, or maybe it will be more community-based services, or personal video. Those are all guesses. I don't think anyone knows.

But everyone agrees that once high-speed multimedia content takes off, the result will affect far more than just the PC.

"In the 1920s, the construction of the interstates brought this country out of the Depression," says Spike Technologies' Bouchard. "We're doing the same thing today with this high-speed infrastructure to the house, and we're going to see an effect that is at least as significant, if not more so."