Kate Bulkley, Media Analyst.

A Mickey Mouse World Wide Web

By Kate Bulkley

Cable & Satellite Europe

www.informamedia.com

01 Oct 1999

It was a strange and somehow baffling sight. There in an elongated semi-circle, in a room deep underneath the Louvre in Paris, sat 29 senior media, telecoms and technology executives from companies around the world.

It looked like the UN of communications: Time Warner, Fujitsu, AOL, Walt Disney, EDS, IBM, Vivendi, etc. And, when Thomas Middelhoff of Bertelsmann opened the session, his tone was persuasive, more of a diplomat than the head of one of the world's biggest and most competitive media firms. "This is an industry-oriented action," he said. "We cannot always wait until governments come to a conclusion."

What has brought them all together is the Web, and specifically what IT is doing to their businesses. Although some 'old' communications players dismissed Web power at first, electronic business is now centre-stage at every company. So, what are these guys in Paris worried about? (By the way it was all men, bar one woman who I saw on the dias, but who did not speak).

It's about control. The Web is not something they can control, at least not yet. It's global footprint and low barriers to entry are what have made it such a revolutionary force. And, of course, the big players with the most to protect want some rules to play by.

For a company such as Disney, protecting its Mickey Mouse copyright is crucial. Telecommunications firms like Telefonica don't want to be held libel for pornography transmitted through their telephone lines. IBM and Fujitsu want to make the right widgets so they don't get left behind.

And of course, consumer privacy and fraud protection will help increase the use of the Web as a transaction tool.

So far, governments around the world have had different and conflicting views about how much to police the Web. So, an eight-month old business group, called the Global Business Dialogue on Electronic Commerce (GBDe), has come up with some standards that the industry can live by. Or, to be clear, that the big industry players can live by. AOL was the 'youngest' of the companies on the dias, and, of course, AOL is no longer a small start-up.

All of this isn't a bad thing. It is probably necessary, if not inevitable, to the development of the Web. But, I do worry that, with regulation and standardisation, the good bits about the hectic nature of the Web could be lost. The entreprenurism that the Web has inspired and nurtured is tremendous. But, Web power shouldn't be underestimated. These leading industry figures say that they are trying to set standards to boost the growth of e-commerce, but it is growing at a pretty fair rate all by itself, thank you very much. Worldwide e-commerce sales are expected to reach $1 'trillion' by 2003.

So, the stakes are big. But, exactly how all of this Web information, entertainment and e-commerce is going to be accessed is a big question.

We have already seen the blurring of strict lines between what modern media and communications companies do. AT&T and Telefonica, for example, are no longer just telephone firms. Many traditional content companies are also getting into distribution. For example, Disney has the Go.com network - its Web-umbrella brand. And, now the ubiquity of the Web brands are starting to seep into the 'old' media channels. US cable TV channel ValueVision, for example, is re-naming its home-shopping service SnapTV.

Remember that Snap is from Snap.com, the San Francisco Web-site publisher owned by NBC and CNET, an online-media company.

A few years ago there was talk about the battle between the PC and the TV. Which would win? More recently, the predicted battle to the death of one or the other has been re-written. Both will survive and probably mutate to do more things, but the focus now is on other devices. From wireless voice and data handsets (kind of like mobile phones, only different) to souped up VCRs that also play video games and receive e-mail, R&D labs are super busy. Exactly which devices, with what features, will be the most popular is absorbing a lot of head time at companies that manufacture this technology, from Nokia to Sony to Motorola.

Motorola recently pledged $11 billion of its stock to buy General Instrument (GI), a big maker of cable set-top boxes (STBs). Motorola plans to put GI into a group that includes its Net and networking groups focusing on "integrated and interactive broadband access." Whatever that means.

Which of these new devices being worked on will win big is a work in progress. But, one thing is clear, the market is going to be big. According to researcher International Data Corp. of Massachusetts, the information appliance market is expected to grow to 56 million units a year by 2002, up from 11 million now. And, just in case you don't play video games like Tomb Raider, IDC predicts that 14 million Web-enabled appliances by 2002 will be video-game consoles. And, the console market will likely not just be Sony, Sega and Nintendo. Microsoft is looking at launching its own console, cum, Internet device as well.

In France, digital DTH provider TPS is partnering with Thomson Multimedia and OpenTV to build a set-top box with a disc drive, the idea being that consumers will want a 'personal digital recorder', to download movies and watch them when they want. TPS is following closely behind two other ventures, TiVo and Replay TV of the US. TiVo has signed up a key strategic partner in Sony. Sony will incorporate TiVo recorders into its future devices and plans to develop content for TiVo-enabled machines.

Of course, as TV becomes more personal and controllable, it is used more like the Net. Advertising can be skipped, as it can when you are on-line, forcing TV advertising to get more sophisticated, or even morph into something else, more closely akin to informative e-commerce.

Meanwhile, the PC is changing too. Microsoft is talking about putting its applications software on the Web? Wow. Sandy Litvak the chief operating officer at Disney told me that no one knows how all this is going to work out, particularly how media companies will look after the Web effect.

"It's all a big bet," says Sandy.

Columns Menu

Home