"personal computers and televisions are becoming "genetically related"
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A PhD for the Idiot Box
Digital Technology Soon Will Blur the Line Between TVs and PCs
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Elizabeth Corcoran The Washington Post 12/10/97
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Television is going digital, with a huge investment in an array of
hardware that will create an explosion of new products and services.
And unlike the "interactive television" flop, industry leaders
promise, this time consumers will like what they see.
The changes are coming in part as the companies that today make the
chips and software and boxes for personal computers muscle their way
into the television industry, with the goal of turning traditional TV
sets from a way to watch "Seinfeld" into digital boxes that can
receive and display a wide range of information besides pictures.
"This is not a PC-TV war," said Robert Stearns, a senior vice at
Compaq Computer Corp. Instead, personal computers and televisions are
becoming "genetically related" as the technology that has
historically made up PCs finds its way into TVs.
Just what the boxes will look like -- and who will make them -- is at
the heart of many of the discussions going on this week at a key
industry gathering, the annual Western Cable Show, held this year in
Anaheim, Calif. The traditional cable companies and set-top box
makers such as Scientific-Atlanta Inc. and General Instrument Corp.
are attending in full force. But also touting their technologies this
year are the likes of computer chip maker Intel Corp. and software
king Microsoft Corp., which aim to marry traditional video
programming with information from the Internet.
Only a handful of these technologies are actually on store shelves,
but they have implications for what people can watch on TV and how
advertisers can reach them.
One of the first "experiments" in mixing PC and TV technology has
been the work by WebTV, which is now a division of Microsoft. The
WebTV Plus boxes, which are selling in limited quantities in stores
for $299, for instance, let users flip between television shows and
the Internet. Thompson Consumer Electronics offers a competing model,
called the RCA Network Computer, which is based on a design by
Network Computer Inc., a spinoff of Oracle Corp. and Netscape
Communications.
In addition, of the 67 million households that subscribe to cable
television, about 1 million have set-top boxes that can receive some
digital signals, said Richard F. Doherty, director of the
Envisioneering Group, a marketing research firm in Seaford, N.Y.
That means that some advertisers will be able to target their
commercials to viewers in particular Zip codes, he said. For
instance, people in cities may see commercials for General Motors
Corp.'s Geo Metro, while those in rural areas may see commercials for
the Chevy Blazer, Doherty said.
But the ambitions of the PC-TV makers go much further. Within the
next few years, industry experts predict, consumers will see a wide
range of equipment that offers not only traditional programming but
also data that will give consumers such capabilities as searching an
electronic program guide for John Wayne movies, or ordering a new
music recording, or flipping through Redskins statistics.
To many savvy consumers, such features may sound very much like the
promises made by "interactive television." About three years ago,
cable companies, including Time Warner Inc., invested millions of
dollars in trying to build networks through which people could order
the videos they wanted to watch -- and a pizza to go with the show.
By and large, those trials were considered a bust.
What went wrong, analysts say, is that those networks required huge
investments that ultimately made the technology far too expensive for
most people.
Companies did learn that many consumers -- particularly younger ones
-- do like the idea of getting more than just a sitcom or a soap on
their TV sets. " 'Tatertots,' or the children of couch potatoes, are
expecting some interactivity" from their television, said Gary Arlen,
who runs Arlen Communications Inc., a Bethesda research company that
focuses on computers and telecommunications.
The technology is catching up with that vision. Intel, for one, is
putting enormous energy into an attempt to make its chips the heart
of this new generation of television devices. "We're trying to make
it easy for the consumer by hiding the technical complexity," but
also by making the devices tremendously powerful, said Ron Whittier,
an Intel senior vice president.
A handful of U.S. cable companies have built their networks so that
their consumers can receive data as well as traditional cable
offerings. Although fewer than 100,000 consumers have such services,
Arlen said, the experiences are giving cable companies real
experience in the new world.
In addition, at the end of next year, the Federal Communications
Commission will turn over additional space on the airwaves to
television broadcasters, opening up the possibility that they can
send high-definition television signals, as well as data, over the
air.
The broadcasters have not resolved just how they will format their
information, and they have clashed with the personal computer
industry over technical standards.
Regardless of the nitty-gritty details, it is clear that all
equipment makers are determined to find ways to marry what where once
the separate worlds of video images and data from sources such as the
Internet, said Sharon Armbrust, a vice president at Paul Kagan
Associates, an industry analyst group in Carmel, Calif.
"Silicon Valley is doing it for its own salvation," Armbrust said.
"They realize that the TV and cable industry represent 98 percent of
American households, while computer owners are still only about 40
percent." Those companies that have built their livelihood around the
PC need a new platform, such as television, to fuel their growth, she
said.
"Everyone's got a stake in the game," she said.
THE TV AND THE PC
While far more TV sets are sold each year in the United States than
are personal computers, TV sales have been falling off in the past
few years as PC sales have continued to climb. The TV industry,
however, is looking to digital products to bolster its sales.
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