TIME WARNER ORLANDO NET INTRIGUING, LIMITED

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ORLANDO-A Japanese TV correspondent turned to an Australian newspaper reporter on a van crowded with media types. "They have 500 people coming here," he said, incredulously, "and it's only in five homes?"

The "they" referred to Time Warner, the "it" to the Full Service Network, the delay-plagued interactive TV network unveiled publicly last week in a hotel just outside of this Florida city.

The Japanese journalist's comment summed up the atmosphere at this painstakingly orchestrated event.

While media pundits and industry observers have sneered at Time Warner for kicking off the trial so late and in so few homes, they flocked in from around the world on short notice to be there when the switch was flipped.

Actually, it was more like 400 people-half of them journalists-who crowded into the ballroom of the Sheraton Orlando North to watch Time Warner Chairman-CEO Gerald Levin punch buttons on a remote control and usher in a new age of TV.

And while it will take years to work the bugs out and determine which services consumers want and how much they're willing to pay, Mr. Levin was not exaggerating by much when he called the rollout "an irreversible step across the threshold of change."

Interactive TV's image has been tarnished in the last year, with good reason.

While the Internet can be accessed today by millions and used to tap an endless collection of global databases, two-way TV trials have become victims of their own hype, bogged down by technical delays.

But if you placed Time Warner's Full Service Network side by side with the Internet in front of the average consumer, the 'net is going to be the one with image problems.

"The Internet is wonderful ... it's also very slow," Mr. Levin said during a discussion with a small group of reporters last week. "The most exciting medium is full-motion video."

Access is another question. Time Warner officials are vague about the number of homes in which FSN is currently deployed, although five seems to be a good guess. The two FSN families made available for media interviews last week are not being charged, though all additional homes will pay for interactive services.

Time Warner still plans to be in 4,000 homes in the Orlando area by the end of 1995 but is vague about its rollout plans after that. Mr. Levin bristled at questions regarding the low number of homes, snapping, "Write anything you like. This is not an experiment. There is no magical date."

There isn't exactly an abundance of viewing choices at this point, either. But those that are available are rather dazzling.

When the TV is turned on using a custom remote control, the viewer sees the Carousel, a navigational wheel of choices: news, shopping, games, education, sports, music and movies.

Clicking on any area takes you directly there. You can also access traditional analog TV channels from Carousel or from an interactive viewing guide.

If you choose movies (currently about 50 are available), you can then pick a favorite genre and scroll through the list of titles. Pausing at any title brings up a promotional trailer. Once you pick a flick, up pops a screen showing the movie's rating, cost and running time plus a synopsis of the plot.

You're also given a viewing window that for now equals 150% of the film's running time. During that time, you have full VCR-like control, with the ability to pause, rewind and fast-forward at the touch of a button. Another button moves you forward 10 minutes into the film, giving you time to catch up if the phone call lasted too long and the viewing window is starting to close. The digital images remain crisp even when paused.

Movies, videogames and shopping are the network's core initial services, though Time Warner also showed off about 20 other products to be added later, including ad-supported news on demand and ShopperVision's grocery service. Video telephony is also planned.

Strolling into the electronic mall, you walk past storefronts for Spiegel, Sharper Image and the U.S. Postal Service, among others. Step in and you see a video catalog that allows you to page forward and back and get information on prices, sizes and colors.

Want to place an order? You can do that at the touch of a button as well (the set-top box stores credit card and mailing information). Hit another button to print out a list of purchases or a directory of stores in your area.

Susan Willard, whose family's home was wired in to the network on Dec. 9, said last week she hasn't purchased anything yet but has browsed through several catalogs.

"It's definitely better than Home Shopping Network," she said. "You don't have to watch a half-hour to see what you want."

The Willard family showed up twice during launch day, first playing cards with Mr. Levin via TV during the morning demonstration and later at a futuristic model home designed by Time Warner's Southern Living.

Whether Time Warner will be able to wrest the spotlight away from computer online services and back to interactive TV remains to be seen.

Mr. Levin said there's been an "image setback," but added, "I can't run a company based on images."

Added another Time Warner executive, "This is about spin control, not technology. There's an expectation that we'll take a beating in the press. [But] as a gateway to the general public, there's an opportunity to dazzle."

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