Cable Ready to go High-Tech
By Andrea Orr
LOS ANGELES (Reuters) - You might think you spend enough time watching TV, but is it really quality time?
When the cable industry hosts The Western Show, its annual trade event in Anaheim, Calif. this week, the exhibit floor will be packed with new technologies that promise to make you and your television a lot more intimate.
After years of dabbling in high-tech ventures, cable companies say they are ready to deliver services that will make televisions more like computers.
They say 1998 will be the year when interactive services will take off, enabling viewers to give their televisions commands far more involved than just switching channels.
The other big push this year is for cable-delivered internet access, which arrives in a fraction of the time it takes to move over a phone line. And for all of the households that still do not have computers, more cable providers are gearing up to offer internet services on the TV.
Critics of these new services say most people find current internet delivery sufficient, and probably don't want to interact with their TVs. But this industry has a long record of taking far-out ideas and turning them into moneymakers.
Remember when 24-hour news sounded like a little too much news, not to mention a 24-hour weather station?
Things have changed since CNN first went on the air, however. Today, cable is a maturing industry and most companies know that if they really want to remain competitive they have to do something other than offer more channels.
"We view technology as enabling a lot of new business opportunities," said Mike Schwartz of CableLabs, a research and development consortium for cable companies.
If interactive TV doesn't sound like the most cutting edge technology, it is because the cable business has been talking about it for several years.
But only recently has the talk turned serious, as cable providers entered partnerships with high-tech firms, who have ironed out the kinks and fine-tuned the new services.
"Interactive was the big thing a couple of years ago but it just didn't catch on," said Schwartz. "Now with technology from Microsoft and Silicon Valley, these kind of services will be less expensive to provide. It will be an enhanced television experience."
For some small business ventures, the future of cable television has already arrived. Road Runner, a joint venture of Time Warner Cable and Time Inc has sold its "blazing fast" internet access to 25,000 customers in the past year and is running neck and neck with industry leaders in some markets.
"We deliver audio, video and graphics at a speed that would just choke a phone line," says Bob Benya, who heads marketing for the Stamford, Conn-based Road Runner. In Portland, Maine, Road Runner has captured 30 percent of the online market.
And Alameda, Calif.-based Wink Communications, which makes interactive technology for television set top boxes, has already collaborated on content with four networks. It will announce eight additional deals at the cable show this week.
Wink's software lets televisions broadcast regular video and interactive video at the same time. So, for example, a person watching NBC could click to get a listing of the guests on the Tonight Show. A viewer might interact with the weather channel to get a custom-made forecast, or order a new product sample while watching a commercial.
"I think we're going to have several million customers by next year," said Maggie Wilderotter, Chief Executive Officer of Wink. "It's extremely important for the industry. To retain customer loyalty, cable companies have to evolve."
But skeptics aren't so sure. So what if cable internet access is 10 times faster, they argue. How much speed does the average customer really need, and will they pay for it.
Cable internet access is currently about twice as much as internet access from America Online, although some argue costs are more comparable after the monthly phone bill for time spent online is factored in.
But cost is not the only issue. Others wonder whether cable companies accustomed to dealing with relatively low-tech service problems like disconnected lines, will be equipped to deliver complex internet solutions.
More fundamentally, some are asking the same thing people are still asking about the internet itself. Will it ever make money?
"Yes it's cool, but is it a business?" asked a spokesman for the California Cable Television Association. "Look at all the internet businesses that went bust."
But most cable operators say it is the very popularity of the internet that has convinced them to venture into the high-tech world. Consumers today are much more comfortable ordering plane tickets, reading newspapers, and pulling all sorts of content off of a computer screen. So why not a television screen?
"The internet is the medium that helped pull this all together," said Wes Hoffman of ICTV, a Los Gatos, Calif.-based company that makes equipment for cable companies to deliver high speed internet access, email and CDRoms into the television.
"Two or three years ago, the internet was just starting. Now it's just about everywhere."
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