INTERACTIVE PAYOFF STILL FAR AWAY

By Published on .

Most Popular
Interactive media's big payoff won't be realized until the development of broadband digital video networks that are still at least five years away, said members of the media elite at last week's Big Picture conference in New York.

"There's a pricing curve and there's a demand curve," said Viacom President-CEO Frank Biondi Jr. at the conference, sponsored by Variety and Wertheim Schroder & Co.

It will be at least 10 years before 60% of the country has video on demand, he said, making Viacom's Blockbuster Entertainment unit viable for the foreseeable future. Even then, he added, there still will be at least 80 million U.S. households dependent on renting movies and watching analog TV.

For now, the technology is still too expensive to make interactive TV a mass medium, said Tele-Communications Inc. President-CEO John Malone. He estimated it would be feasible to deploy such services only when a typical household could be equipped for $500 to $600.

In the meantime, Mr. Malone said TCI is taking an "evolutionary path toward that," such as its joint venture with Microsoft Corp. to test an interactive TV network in Seattle later this year.

"Nobody really knows where the profits are going to come from," said Craig Mundie, Microsoft VP-advanced technology, adding, "We're not going to create an increment in the gross national product overnight. So what we're really talking about is a shift in share."

Mr. Mundie said interactive media will likely attract a share of consumer spending currently going to analog forms of entertainment, information and educational media.

But Edward Horowitz, senior VP-technology at Viacom, said that shift will not occur soon.

"I don't think it will be a share shift from everybody watching television nine feet [away] to everybody watching television 18 inches in front of a [computer] screen. We have to manage our expectations," he said.

Mr. Horowitz said the Internet is a positive model for interactive media but is still primarily a promotional platform that doesn't provide many moneymaking opportunities.

But Stuart Johnson, group president of large business and information services at Bell Atlantic Corp. and chairman-CEO of Bell Atlantic Video Services, said the Internet is an ideal place to prototype and begin testing programming that could be developed later for broadband digital video networks.

Indeed, most of the panelists said the consumer marketplace won't be developed until meaningful applications are created, regardless of the technological capabilities.

"The minute D.W. Griffith moved the camera, it changed the face of film. We haven't even moved the camera," said Red Burns, chairwoman of the interactive telecommunications program at the Tisch School of the Arts at New York University.

In this article: