Just a few years ago, every discussion on the future of the media included the term "electronic superhighway." Inspired by the rapid advances of computer technologies and equally impressive increases in PC penetration, this phrase described the path to a digital world in which computers replace the established media. Today, "electronic superhighway" sounds oddly old-fashioned. The term has been replaced by a new, equally ubiquitous one: "convergence."
The new slogan represents a small shift in conventional wisdom concerning the multimedia future. A few years ago, high-tech philosophers such as Nicholas Negroponte saw only computers at the end of the electronic superhighway. They regarded other media as inferior to the computer in nearly every regard. But even the most enthusiastic Internet-surfers are still using papers and magazines, and few have sold their TVs and radios. A more moderate view seems to be gaining acceptance among technology futurists: the "old" media will converge with the computer. This means, for example, that television will not simply disappear. It will survive after it is enhanced by computer functions.
Predictions about the death of established media have accompanied the introduction of every successful medium in this century. During much of the 1950s and 1960s, television was widely believed to be Hollywood's arch enemy. Many thought that cable TV, pay TV, and VCRs would have killed the networks before the end of the 1980s. When reality proves such predictions wrong, they usually are quickly forgotten. Pundits move on to speculations about how the old media are adapting and how people use the various media. The current discussion is a variation on this enduring theme.
Yet there is something new in the current debate, which makes it more compelling than many of the predictions of the past. The new multimedia technologies enable the creation of a variety of converged media products. Companies from different industry sectors are already working together to bring about the convergence of computers and TV sets. Thus, while early "electronic superhighway" predictions had much less to do with science than with fiction, the current "convergence" discussions are neither philosophical debates nor science-fiction fantasies.
CONVERGENCE CATEGORIES The term "convergence" is most frequently used in connection with computers and television. Three aspects, which are interdependent but separate, are usually considered. First are technological innovations that enable the convergence of different appliances and their functions. Second is cooperation among companies from different sectors, or the expansion of companies into hitherto unrelated industries. Third is changes in consumer behavior, specifically, the adoption of interactive-television usage patterns that are similar to Internet-surfing. Let's take a closer look at these three aspects.
Technology convergence: despite initial problems, new technologies that allow convergence between TVs and PCs have been developed. Prototypes of appliances that incorporate these technologies have appeared at trade shows and are expected in stores later this year. Whether these appliances will be primarily television sets with computer functions (TVPCs), or more like computers with TV reception facilities (PCTVs), is not clear yet. Their final form will depend on consumer reaction.
Industry convergence: Microsoft's purchase of Web TV, MSNBC, and the collaboration between computer and cable companies to create faster Internet connections are evidence of business strategies that build bridges between the computer and media industries. This kind of convergence is moving forward, albeit at a slower pace than some have predicted. About five years ago, it seemed that phone companies were about to become major television players who would pave the interactive TV lane on the electronic superhighway. That did not happen. Also, the interests of the different industries are frequently at odds. For example, the technical convergence of PCs and TVs could have happened sooner if the consumer electronics and computer industries had been able to agree on a standard.
Consumer behavior convergence: the third meaning of "convergence" is the most important. Consumer preferences have a decisive influence on the manner in which the technology options are applied to consumer products, and they also impact how companies will and will not work together. An analysis of the factors that will determine the nature and the extent of convergence in consumer behavior is an essential part of any attempt to predict the development of the media.
FROM COUCH TO "CONVERGED"? Convergence proponents generally assume that consumers will quickly accept the new products, and that "passive" television viewing behavior will be replaced by more interactive-behavior patterns. Rarely will we be watching television as we used to, as "couch potatoes." Most of the time, we will take advantage of the added options provided by multimedia technologies by calling up additional information on news reports and by multi-tasking (such as doing computer work while watching a football game).
Some advocates of convergence argue that current empirical data cannot really help us predict changes in consumer behavior. Others point to empirical evidence that they believe supports those predictions. They cite surveys reporting that about one-third of computer users says their TV use has declined since they bought a TV, and that many parents say their children prefer the computer over the TV. To really understand and predict accurately how consumer behavior might change, however, one should not only look at early adopter surveys. We have to look at all the research and all the consumer segments; we have to understand the new media in the context of traditional media. And a critical evaluation of all the evidence does not support predictions of imminent changes among America's TV viewers. It points to a slower-and more differentiated-evolution of media-usage patterns.
There is an abundance of research data on use of the new media and of television, from companies like Arbitron Pathfinder, FIND/SVP, Media Metrix, Nielsen Media Research, Odyssey Research, Yankelovich Cybercitizen, and many others. My review of all the evidence, including internal NBC studies that explored the reasons why people watch and why they use the Internet, leads to three key conclusions.
First, most PC and Internet users ascribe different functions to the PC and the TV. The PC is primarily an information tool, and the TV is primarily an aid to entertainment and relaxation. Information, entertainment, and relaxation are different, enduring needs. They don't automatically converge because technology is converging.
Second, many of the survey data on the new media are contradicted by more reliable metered data. Those data indicate that most PC users have not significantly reduced their TV viewing, and that young people have not abandoned TV.
Third, general statements about the entire population are not particularly useful in this field. Averages often hide significant differences in usage and attitudes. This is and will be a very segmented market. The data suggest that there will be convergence in TV and PC usage among some segments, some of the time, with and without the new converged appliances.
DIFFERENT MEDIA, DIFFERENT FUNCTIONS Regarding the first point, there is widespread agreement about the different functions of the PC and the TV at this time. These differences are reflected in the way these appliances are used as well as how they are perceived by consumers. However, there is less agreement on the inferences to be drawn from this with regard to the future of television viewing.
In my opinion, the relaxing entertainment function of "old-fashioned" TV viewing is very rewarding for most people and will endure. It is true that watching a movie or a sitcom is a "passive" experience compared with PC interactivity. But generally, if you like the movie or the sitcom, it is an experience that cannot really be enhanced by interactivity. It is important to point out that there are TV uses that sometimes lend themselves to interactive enhancements, including news, sports, and some commercials. But most people like entertainment and don't always want to interact with sports and news. Advocates of PC-like TVs often ignore the role of entertainment and place too much emphasis on news and information uses of the TV.
Regarding the second point: too often, self-reported survey data about PC usage are accepted uncritically while more reliable meter-based data are ignored. Since we know that most people (not just early adopters) regard computers as important and useful, and since we also know that many people feel a bit guilty about watching a lot of television, shouldn't we be skeptical when people tell us they are spending hours and hours doing important stuff on the computer, watch less TV than ever, and have computer-savvy 2-year-olds? What do reliable data tell use about people's actual behavior?
The best usage data available at this time come from the 10,000 PC household panel of Media Metrix. Total PC usage stood at about 25 hours per month in October 1997, and it has not increased during the last 12 months since new buyers use the PC less than early adopters. Internet usage, however, is increasing steadily. It is now over 6 hours per month. And how about usage by children? They may use computers at school, but only teens are busy playing PC games and surfing the Web at home. Half of children in PC homes don't use them at all.
Do PC owners still watch TV? Nielsen Media Research can now supply television ratings for homes with and without computers. These data were computed for the first time ever in October 1997. The result: prime-time usage in PC homes was at 59 percent. In homes without PCs, it was 60 percent. (This means that during the average minute, 59 percent or 60 percent of the sets were on. Monthly TV use by adults who have PCs in their homes is close to 100 hours per month. The use of America Online can be compared to the rating of a medium-sized cable channel, and it is a fraction of the ratings of any of the four big networks. During the day, PC homes watch less TV than those without PCs, but it appears that employment status is the driving factor here. After all, PC owners are more likely to be employed, and these data do not control for socio-demographic differences between PC and non-PC homes. Finally, Web-surfing children who do not watch TV are the exception. Nearly all children and teens watch more TV than use the PC at home.
Finally, regarding the third point: the Media Metrix Web ratings, and other data as well, reveal that average numbers are not particularly useful. There is a segment of frequent Web users, for example, but it is not growing as fast as the group of infrequent users. There is also a large group of people who have no interest in the new media and, contrary to many predictions, that segment is shrinking more slowly than the icebergs in Antarctica. One technology prophet was recently quoted as saying that PC penetration "should be" well over 60 percent now. He was essentially chiding Americans for not living up to his unrealistic forecast.
In short, all the data point to a segmented market that is changing, but will remain segmented. This suggests that there will be fans of new multimedia appliances, and there will be convergence in TV and PC usage. But it is unlikely to become a dominant pattern. In addition, the existing data indicate that another kind of new media usage may be evolving, which is less a convergence than a TV-PC interaction.
An article in the Journal of Advertising Research indicates that many PC owners have a TV and a PC in the same room and that they sometimes use them simultaneously, sometimes by going back and forth. The data also demonstrate how TV promotion drives Web traffic. In fact, many of the most successful Web sites are maintained by media companies that use traditional media to promote these sites and, in that way, achieve their goal of serving their audience in the "old" and new medium. One could argue that such connections would work even better once new appliances can make "seamless" transitions. However, consumer data indicate that many people are looking for simpler, cheaper PCs and bigger TV sets. As a result, converged multimedia appliances may not become as widespread as some people assume. After all, TV/VCR combinations never took off.
If these analyses are correct, there won't be a convergence revolution in consumer behavior any time soon. Rather, it will be a slow, evolutionary process. For quite some time, it could well be that interactions between the two media on separate appliances may become the predominant convergence pattern for the half of Americans who have PCs at home. But even for them, as for Americans without PCs, convergence will only mean new appliances and new companies. It will not mean new ways to relax and be entertained.
TAKING IT FURTHER To contact the author, fax (212) 664-7292 or e-mail [email protected] For more information about PC Meter, contact Media Metrix in New York, NY; telephone (212) 460-7980, fax (212) 533-3036, or Internet http://www.mediametrix.com. Simultaneous PC and TV use is discussed in an article by Stipp and Coffey in the March/April 1997 issue of the Journal of Advertising Research, published by the Advertising Research Foundation in New York, NY; telephone (212) 751-5656. The annual TV Dimensions ($260) is published by Media Dynamics Inc., New York, NY; telephone (212) 683-7895; fax (212) 683-7684; Internet http://www.MediaDynamicsInc.com.