Tom,
I am a huge fan of CKFR and have been for several years as both a user and stockholder. The only problem I've never quite figured out is how we are going to convince the masses of what you & I already know.
I am forever trying to sell Checkfree to my friends and acquaintances, with some success. But there is a large segment of the population that is still very comfortable licking stamps and has no desire to change. Online banking is not something they think they need. On top of that, they don't understand computers and the internet.
Look at the following article from today's Wall Street Journal. The author brings out some very good points along these lines. I'll be interested to hear your opinion and others.
November 5, 1998
To Become a Mass Medium,
Web Must Be Freed From PC
WHEN YOU TURN ON television these days, the airwaves are so full of web page addresses and breathless technology hype that it's easy to believe the Internet is as much of a mass consumer medium as TV itself. But that conclusion would be way off base.
Nearly every U.S. home, in every economic class and neighborhood, has at least one TV set, and often several. The same goes for the other great consumer technology: the telephone. TV sets are common even in small villages in small countries. But only about 27% of American homes boast an online connection, and the figure is far lower in most other countries. The Internet simply is not yet a mass medium.
Sure, lots of people use the Web from work, but that isn't likely to spawn vast consumer-oriented online businesses, because savvy companies increasingly limit the time and scope of employee Web browsing, for security and productivity reasons. So the big dividends will come in the home, and that 27% figure is just too low to support the grandiose connected world that Internet zealots predict will be upon us in just a few years. The spread of the Web looks spectacular, when measured against a low base, but it's less impressive than it seems.
We know what a mass medium looks like. Even in an era of declining
network-television viewing, shows like "Seinfeld" can draw 25 million or 30 million households -- more than the total of Internet-connected homes -- simultaneously for a solid half-hour. But the biggest consumer gateway to the Internet, America Online, can only accommodate about 800,000 of its 13 million members at any one time. That's more people than typically watch CNN during daytime hours, but far fewer than watch even some obscure network and cable series. What's more, those AOL members are dispersed throughout the Web at thousands of sites.
THE WEB, of course, isn't a mass broadcast medium, but a medium which
can "narrowcast," sending smaller but more dedicated audiences to content and services tailored to their interests. But it will still need to attract millions of additional regular users before it can challenge established content and services in the physical world.
So what will it take for the Internet to become a mass medium? The typical answer is more bandwidth to the home, providing faster, bigger connections. That's true. But I think there are four other things that need to change one of them crucial. Home connections must be not only speedier but cheaper and automatic -- always open. Compelling content also must be developed. The Web needs its own Milton Berle, the performer whose popular show in the 1950s got people to buy TV sets. In fact, it needs many Milton Berles. And the Web needs much better business models, so companies there can earn profits, not just publicity.
But by far the most important thing needed for the Web to become
ubiquitous is a replacement for the personal computer as the main
device people must use to get there. The Web is imprisoned in the
PC. Its growth is limited by the adoption rate of this clumsy, complex, unstable device which even at $800 is too expensive. After two decades as a mass consumer product, the PC has entered just 45% of American homes. Two full years of dramatic price cuts have failed to push PC penetration over 50%, and those price cuts are showing signs of leveling off.
Even if PC penetration creeps over 50% next year, it will need to nearly double again to match the TV, which was a common presence in homes just 20 years after it became a mass-market item in the late 1940s.
ONE OF THE Internet's most optimistic gurus, Nicholas Negroponte of
the Massachusetts Institute of Technology, has acknowledged the PC
problem. Last summer, writing in Wired Magazine -- the bible of Internet utopians -- he described his shock at having to shop for a PC himself, after years of depending on others to do so. "Suddenly I realize that even with so much of MIT's computing talent at my
disposal and no care whatsoever for what things cost, I am no better off than peasants in Pakistan confronted with their very first computer," wrote the technically savvy Mr. Negroponte. "Today's machines are just too complex to be accessible."
The best hope for Internet ubiquity is the rapid development and marketing of simpler, cheaper devices, which I've been calling information appliances in this space for years. These machines, like Microsoft's WebTV set-top box or the new Jupiter-class mini-laptops, are designed either just to access the Web and e-mail, or to do that plus a few other, limited tasks, such as word processing or keeping a calendar.
They aren't designed to run thousands of software packages, or to be all things to all people. But they turn on instantly, connect to the Web simply, crash rarely and spare users from having to master complex, general-purpose operating systems like Windows or the MacOS.
Those who want universal Internet use need to drop their techie sensibilities and look at the world beyond the PC. They need to cheer heartily for the info appliance projects now being undertaken at companies inside and outside the industry. Unless we get a truly simple box with which to access the Internet, something as easy and reliable as a TV or phone, the Web will remain a partial success, a diversion for techies and the privileged.
Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.
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