Keeping the U.S. Computer and Communications Industry Competitive Convergence of Computing, Communications, and Entertainment (1995) / Chapter Skim
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As a result, the true nature of digital convergence may not be reflected accurately by either its advocates or the popular media. Illustrating the swings in opinion, sample headlines and news story themes between mid-1993 and mid-1994 included "Multimedia Is Growing by Leaps and Bounds"; "Race for Multimedia Crown Speeding Up: Companies Team to Get Jump on Interactive Services"; "Merger to Create a Media Giant"; "With Merger's Failure, an Industry Seeks a Leader"; and "Hurdles Slow Information 'Superhypeway."'
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Although sales figures for existing industries are neither directly comparable nor additive, they give an indication of the potential economic impact: catalogue shopping ($70 billion in current annual U.S. revenues; WOOD, 1994)
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, information services (currently $9 billion; Turner, 1993a) , video games (currently $6.5 billion; Tetzeli, 1993; Pereira, 1994)
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, but they appear to offer an analogous experience base. A note of caution comes from the rocky experience of on-line services aimed at households; despite growth and new entries, such services have had difficulty arriving at user interfaces, pricing schemes, and product and service packages that would generate consistent profits.3 Computer-based services aimed at the mass market generally may become more successful, given astute marketing and management decisions as well as the expanding base in household equipment: about 95 percent of U.S.
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Participants included representatives of the computer, telecommunications, and entertainment industries; diverse government agencies; the Congress; academia; trade associations; and the media stakeholders and independent analysts participated.6 The steering committee sought to construct colloquium panels with a more diverse set of perspectives than those typically aired in today's press or in other venues such as industry conferences and academic conferences. This report presents the principal insights and perspectives offered by colloquium participants.
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Like most colloquium participants, Ginn remarked on the difficulties and uncertainties associated with realizing the various visions of the benefits promised by digital convergence. Economist and economic historian Paul David of Stanford University observed that visions, while constructive, can blind people to near-term, practical impediments to implementing technological advances: Private investors and public decision makers are correct in thinking that they disregard at their peril the real hazards of a condition .
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Will there be a central component of the evolving information infrastructure, and if so, will it be a telephone, computer, cable, or wireless network, or perhaps some combination? Will information services catering to the masses ever be profitable, or will significant public investment and private contributions be needed to assure both public access and the flow of public-service information for which markets may never fully develop?
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cable company, which would constitute one of the largest corporate mergers ever. The proposed merger received considerable fanfare; typical if breathless were remarks from an article in the New York Times (Fabrikant, 1993~: The merger is of stunning significance because it creates a gargantuan company with both the financial wherewithal and the management skills to chase the holy grail of home information and entertainment possibilities: a vast panoply of programming and information offerings that are available at the flick of a wrist whenever a consumer wants to see them.
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Despite the raising of expectations and ambitions in many quarters, the mere fact that new business activity or alliances have been launched does not mean that industries are truly converging; that would require significant shifts in industry cultures that will take a long time to achieve, as well as changes in fundamental technologies and in consumer behavior. Although much of the discussion about digital convergence seems to focus on the development of a delivery infrastructure for entertainment and other products, many challenges remain for joining the diverse cultures of computing, communications, and entertainment to make as well as deliver globally competitive products.
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Although there has been conspicuous activity among telephone companies buying into cable systems outside their service areas, interaction between telephone and cable companies underscores how what is technically possible becomes confounded by what is legally feasible and economically attractive (Kim and Wloszczyna, 1993~. The Time Warner Full Service Network experiment illustrates the complicating factor of evolving technology.
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and on general-purpose devices, including personal computers and CD-ROM players, plus various hybrid devices, such as that offered by 3DO.~5 AT&T, Time Warner, and Matsushita Electric Industrial Company backed the company 3DO, which in early 1993 unveiled its design for an "interactive multiplayer," a CD-based machine that hooks up to a television set and combines graphics, text, and high-quality sound. The 3DO venture epitomizes the uncertainties characterizing the digital convergence marketplace.
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CONCLUSION Numerous obstacles must be surmounted in developing and assuring access to new information technologies, as well as in promoting positive consequences of their use over negative ones. Some of the problems are technical: for example, high-bandwidth, two-way communications systems are neither cheap nor widely available; there is a multiplicity of standards for representing raw information, while lack of consensus exists on standards for integrating services across different systems, a problem that threatens to grow as new interfaces proliferate.
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"In a recent interview, Microsoft Chairman William Gates said that the company was vigorously pursuing growth opportunities in the so-called multimedia field, where sound, images, and moving pictures are meshed together with the help of computers and software." 9. "The hard part is figuring out just which of these and a plethora of other services people want and how to design them so they are as easy to use as television and yet bring improvements that are tangible enough so that people will pay for them" (Andrew s, 19931.
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"AT&T executives said Consumer Products will aim its investments instead at 3 product areas: digital wireless phones, where it has been deficient against mounting competition; phones for foreign markets; and intelligent phones for the home that the company plans to begin marketing next year" (Keller, 1994~.
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