To: ftth who wrote (9916 ) 12/26/2000 4:48:00 PM From: EJhonsa Read Replies (1) | Respond to of 12823 ftth, thanks for correcting me regarding me WebTV's actual subscriber numbers. However, I don't think that the relatively limited enthusiasm that the service has seen so far can necssarily be used as grounds for concluding that interactive/internet TV services won't take off. To see why, all you have to do is take a look at the weaknesses inherent in the WebTV platform, and the effects they had on the purchasing decisions of potential customers. First, I can't see how any PC owner (myself included) would ever want to bother with WebTV, due to its limited capabilities (both in terms of graphics and applications), and due to the fact that a second ISP subscription would be required, in conjunction with the subscription that a user has for his/her PC. So all we have left now is the infamous, IT-averse "other half" of the population. The problem here is that, like a PC, WebTV requires such individuals to purchase hardware which costs $100 or more ($150 or more if you want one that allows you to watch TV at the same time); if these people don't want to bother buying a low-cost PC, with all the functionality it affords, why will they bother with a box that provides nothing but internet access via circa-1994 graphics? My point here is that this portion of the public (my mom's a perfect example) tends to be so IT-averse that, as long as they have to make an up-front payment for the necessary hardware. Now contrast this to the situation that's set to emerge as interactive set-top boxes with in-built cable modems and 2D/3D graphics subsystems start hitting the market in a few months: 1. Since cable operators generally subsidize the cost of a set-top box, no direct hardware purchases are required on the part of the cable subscriber. Thus, not only are internet/interactive TV services are just a few clicks away should a subscriber want them, an operator could easily offer free trials for these services, in order to get "the other half" to enter into uncharted territory without any financial committment on their part. 2. Since a next-generation set-top box, unlike a WebTV system, allows for broadband connectivity and the display of high-quality graphics, a number of interesting applications can be opened up related to streaming video and online game playing. 3. Instead of having to apy a full $20-$25/month more, as is the case with WebTV, existing PC internet users could be offered a bundled service in which they can have PC and TV internet access, along with interactive TV services, at a cost only slightly higher (i.e. $5-10/month more) than what they would pay for standalone PC internet access via a cable modem. Obviously, the upcoming next-generation set-top box rollouts will open up a ballgame with dynamics far different from the one presented by the likes of WebTV and Worldgate. How it'll exactly play out could prove to be one of the most interesting stories to unfold over the next few years within the consumer electronics industry. Eric