on portals & other strangers...
Reporters Notebook
Live Digital Living Room Coverage
June 23, 1998
By Tish Williams and Phil Harvey
Big Media Companies Do Not Big Web Sites Make
Will the big media and entertainment conglomerates take over the Internet? They may someday, but according to a Tuesday afternoon panel with Time, Paramount and Discovery, they're having a helluva time trying.
Lewis Henderson, head of new media, William Morris Agency, spoke with Linda McCutcheon, president, Time Inc. new media, Kaaren Shalom, director, interactive marketing, Paramount Pictures, and Andrew Sharpless, senior VP, interactive media, Discover Enterprises Worldwide, about what works and what doesn't in the business of taking a recognized media leader online.
According to the panelists, they're still looking for a consistently successful formula for Internet profits. "We are now in search of the illusive three-camera situation comedy of the Internet," said Sharpless. "We haven't figured it out yet, but we need to."
Without making enough bank on their own, Web sites are struggling to find an audience and extend the brand of more well-established mediums. On the other hand, as McCutcheon put it, "I have to ask myself, 'How can Time inkless help Time Inc.' "
Clever. Right outta Dilbert.
Besides being a value-added service and increasing appetite for existing products, Web sites have to establish stand-alone credibility. This identity crisis only adds to the bitterness that comes up when you mention the word "Yahoo."
"Internet portals are a Wall Street reality, not a consumer reality." McCutcheon said. "All portal traffic represents on 15 percent of all the world wide Web traffic and that's not that much."
McCutcheon hinted that after new users develop bookmarks and establish where they want to go when they get on the Internet, the portal fever is gone and they're only an occasional stop--just a way to get to someplace else. "To the extent that they limit access to great sites, they are to the detriment of all of us."
Verba says it's all in the attitude. "Portals can't differentiate themselves by what they offer, but how they present the information."
So what does work online? The panelists' answers were all about the same. Information, news and, to some extent, an attempt to make an emotional connection with the person visiting the Web site via audio clips or video-on-demand.
Shalom even suggested that role-playing games related to movies had been popular on the Paramount site. McCutcheon responded, "You mean people actually wanted to be on the Titanic?"
Meow.
In the end though, the answers for eventual success on the Web haven't changed. McCutcheon says, "What matters is not how many pages someone visited on your site, what matters is that they come back."
Now, what was the question?
--Phil Harvey
Insiders Don't Get Web "Portals" Either
It was a panel of content people. The head of Time Inc.'s new media efforts, Linda McCutcheon, Kaaren Shalom from Paramount, E! Online's Jeremy Verba, and Andrew Sharpless from Discovery's Web site. I figured these people would know about the Web site aggregator frenzy.
Nope.
You'd think content people would be blowing Yahoo, Infoseek and others air kisses. Offering them Cohiba cigars and sports cars. Charming their pants off.
Wrong. Instead they're snacking on Meow Mix. They don't like Web "portals."
All the represented companies enjoy hulking, dominant old media brands. These people have sterling reputations off-line, with marketing budgets that would send Yahoo crying and wandering distressed on Shoreline's reclaimed landfill coastline.
And they are pissed about portals.
Take Linda McCutcheon of Time Inc. She's got Money magazine's consumer reputation on her side. But who gets the hits? Yahoo Finance.
Hyperventilate now, old media.
McCutcheon is calm, cool and collected. But she's not afraid to admit that her tough-guy brands will collapse under pressure if their information becomes a commodity. Yahoo is a fun brand that has a lot of money behind its name and image. But it might not take the specific information, stock quotes and analyst upgrades, with the levity and seriousness of McCutcheon.
She's still lucky, according to the Forrester statistics she yields as weapons--Web content aggregators only attract 15 percent of Web traffic, and they're only growing as fast as the pool of Web surfers grows. That means their market share is holding steady. (I'd like to see those numbers, because I'd have to believe Yahoo et al add up to more than 15 percent ... unless AOL is thrown in the mix in a creative way.)
But there's still room for Time's brands and publications to steal Internet users, and enlist new surfers. But with big Disney bucks and heightened Hollywood interest, that window may be closing.
--Tish Williams
Left to our own Devices
What will wait on me in my networked home?
I've got to admit it's hard sitting in the ballroom at the Ritz-Carlton, just a few feet from a gorgeous beach, trying to concentrate on home networking and the future of the digital living room. How can you possibly focus on making the devices in your home work more efficiently and integrally when you're being waited on hand in foot in the lap of luxury? Not that I'm complaining.
When I sat down for dinner Monday evening, one waiter began folding my napkin so meticulously he looked like he was in the color guard at Arlington National Cemetery, while another pushed my chair in and yet another presented me with a choice of fresh wines. In the living room of the future, I've figured out that I don't want a networked home with connected devices that improve the quality of my life--I want a staff of waiters.
In the meantime, if you can't afford a full-time staff, a networked home doesn't sound too bad. The Home Phoneline Networking Alliance (HomePNA) says that home networking can and will be done using existing phone lines by the end of this year. Cool! You'll be able to transfer data, voice and video simultaneously, says the Alliance, which was founded by 3Com, AT&T Wireless, Compaq, Epigram, Hewlett-Packard, Tut Systems, Lucent, Rockwell Semiconductor Systems, AMD, IBM and Intel.
Networked homes will happen. Everyone seems cool with that, though the specific designs vary depending on whom you're talking to--the HomePNA or its competitors. One question that's been lost among the gourmet meals and perfectly laid place settings here at the Ritz is: What the heck are the devices in these networked homes going to look like?
During the opening keynote, Dr. David Liddle, CEO of Interval Research, said that when the home network of his dreams comes to fruition, all devices will be equal, users will only see their speakers and screens, and the tuners in your entertainment centers will be invisible to the untechnical eye. "This is a world when an alarm clock will be a request--play this tune, through these speakers, at this time--instead of a separate device," Liddle said.
Roel Pieper, executive vice president of technology, strategy and planning for Philips Electronics, whose speech was beamed in from Amsterdam, added, "We need to just think about how we can bring modular capabilities--in the smallest, cheapest form of technology--to market, while leveraging what is already there either in the car, home or office."
Pieper also said that consumer-electronics companies, which will presumably make the devices for these networked homes, should stop designing the devices to fit in the desktop-computing metaphor and start using life metaphors. Booting up and pulling down menus will eventually give way to pointing, talking or gesturing, he said. Nevertheless, finding the user interface that will make sense for consumers will require tremendous amounts of research.
The industry finds itself in the same position I'm in as I look at the beach from my hotel room: We're so close, but we're not there yet. And until we get our column typed and put some pants on (metaphorically speaking, of course) we're going to remain further away than we'd like to be.
Some pieces of the puzzle, early information appliances, are already here. CIDCO's iPhone, PlanetWeb's Interactive Phone, General Magic's Magic Phone are all just what a networked home needs: easy-to-use devices that provide the right information at the right time in the right place. As Don Norman, a senior technical advisor at HP's Appliance Design, said Tuesday, "Information appliances need to be supplemental to our lifestyle, not interfering."
Like the squadron of willing waiters at the Ritz, information appliances may not look like the devices we're used to, but if they're made right and less complicated than personal computers, they'll give us what we need, when we need it.
--Phil Harvey
Welcome to Home Entertainment Paradise
LAGUNA NIGUEL--Welcome to the tropical confines of the Ritz-Carlton Hotel in Laguna Niguel, Calif., where hundreds of technology and entertainment types have gathered to drool at the Southern California coastline between Digital Living Room's power-packed executive panels.
Digital Living Room has brought together a group of executives who are struggling to make the Internet and networking pay off in the home. Right now they are in pain. Very soon they will be in the money.
These are the folks who take consumer audiences seriously. Not your Michael Dells. These are the people who have to worry about children's issues on the Net, which appliances will win out in the long run, and who will provide residential areas with broadband bandwidth.
Oh, that.
Let's just say there's a lot of cathartic laughter going around everytime anyone bashes computer and Internet technologies for being difficult-to-use, buggy and unintuitive.
Letting the Cat out of the Bag
Intel's Avram Miller took the stage with his typical quirky flair, to talk about the PC in the home. Miller was on the hunt to kill the vision of smart toasters, smart fridges and smart eggbeaters.
He's from Intel, people! He doesn't want smart place mats on your table. He wants a PC serving up a whole network of extremely dumb appliances. Intel's not focusing on the cheap chips these days, except in the sub-$1,000 PC market. And it has its hands full there.
Miller explained Intel's vision of PCs as servers in the home controlling all your residential needs: "I find it hard to imagine that all these appliances will be able to evolve as quickly as the PC," Miller said. "So when we improve our personal computer, our home server, we improve the power of all our appliances."
See, it's so simple. PCs are like ketchup. They go well with everything.
Miller promised to deliver 100 times the chip performance in 10 years. As for PC sales increases that keep in step, Miller tried to keep the crowd calm by explaining that PC sales "come lumpy. There are years with lots of growth and years without a lot of growth."
Phew. So this is the smooth, runny part of the PC sales curve.
Miller shut the door on the comparison between TVs and PCs--although they still vie for Jedi mind control of viewers. Miller said PC purchases shouldn't be directly compared to TV buys and said PCs are more like cars to consumers. They are expensive and hard to use, and compared to TVs' 10-year life spans, are short-lived.
Giving us a glimpse at the dark underbelly of his personal life, Miller extolled the virtues of the seven PCs he has in his home. He has two ADSL networks and MMDS hookups. "I live alone, that's why," said Miller. When asked which came first, the PCs or living alone, Miller shook his wild gray hair, took the Fifth and joined in the crowd's laughter.
Finally, in wrapping up his talk with quick questions from the audience, Miller quickly tired of questions about which technologies and services people will need in the home. "Frankly, we don't need any of these things. This is not a question of need."
--Tish Williams
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