What's holding up media convergence?

From Knowledge@Wharton

Special to CNET News.com
April 4, 2001, 4:00 a.m. PT
http://news.cnet.com/news/0-1005-201-5465805-0.html?tag=prntfr

Convergence--a buzzword much employed in certain circles--is a lot like the
weather: Everybody's talking about it, no one can
control it, and how you prepare for it depends on where you are.

Engineers view it as the challenge of routing Web content and e-mail into
cellular phones, handheld computers and pagers.
Brand managers and marketers see convergence as the merging of formerly
distinct disciplines such as television, print media
and commercials blending into a single stream. Example: Sports Illustrated
magazine reporters working on CNN, both of which
are now subsidiaries of a new hybrid "network" called America Online.

Beyond these perspectives are complexities of consumer loyalties and
behavioral issues. One survey has found that one in
four families is watching television at the same time they are surfing the
Internet. Which is their top priority?

That question and more came up at the inaugural session of the Wharton
Technology & Media Conference held in Philadelphia
on Feb. 16. Joseph Nacchio, CEO of Qwest Communications International,
delivered the keynote address. In addition,
Knowledge@Wharton teamed up with CNET News.com to sponsor a panel discussion
moderated by David Farber, chief
technologist at the Federal Communications Commission and a Penn professor
of engineering. The panelists included Jim
Banister, co-founder, Windsor Digital; B. V. Jagadeesh, CEO, NetScaler and,
before that, Exodus Communications; Jeff
Morris, CEO, Yack.com; Carlos Silva, vice president, AOL Devices Product
Studio; and Andrew Zoldan, vice president of
Internet applications, Siebel Systems.

"We're faced with having to integrate disparate types of information in a
rapidly closing technology environment," Nacchio said.
He pointed out that convergence poses a dual dilemma: figuring out how fast
technology is moving, and answering questions
such as, "What are people really going to use and what are they really going
to buy?"

"Very few people have experienced the true convergence of voice, data and
video," Nacchio said.

Morris, who heads Yack.com, an online guide to 700,000 hours of streaming
media available daily on the Web, provided a
measure of convergence success. When his company directs people from one
medium to another and back again, he
considers that a sign of things coming together.

In the early days of direct broadcast satellite programming, people who
bought their home satellite dishes expected to see
thousands of programs for free. It took four years for the industry to
encrypt the content to thwart cable TV pirates, Morris said.
That model is being repeated today, as Internet connection speeds have
increased and equipment prices have fallen. The basic
content costs have declined in tandem, so that premium content and
higher-speed delivery are the only revenue sources left.

"No one can make it on a single revenue stream anymore. But four or five
years ago convergence was defined differently.
People called it interactive television," Morris said.

The lines between work and home have blurred, with some expectations that
the computer "desktop" idiom of the 1980s will
soon give way to a game or virtual reality interface more familiar to a
younger generation. In time, work tasks and documents
will look more like magazines, TV programs and familiar "media" that have
previously been vehicles for entertainment,
predicted Siebel Systems' Zoldan.

Instead of computing systems that tie co-workers together more closely, the
next revolution will be in bringing consumers
closer to the companies that serve them. Companies already are grappling
with questions of how much personal data
consumers are willing to divulge in return for more personalized, responsive
service.

Predictably, there will be people who refuse to converge, or who see little
value in the convergence of different appliances and
media. Jagadeesh of Netscaler, a company that caches Internet content for
faster delivery, represented that point of view.

"I don't want to sit in my family room and read e-mail on the TV. That's a
private communication," Jagadeesh said. "And people
don't feel comfortable watching multimedia on a PC."

Interestingly, the term "programming" has come to mean exactly the same
thing in once separate industries, said Banister,
founder of Windsor Digital, a next-generation entertainment company. The
word was used by computer engineers to identify
the functions and code that allowed people to perform specific tasks. In
television, radio and films, the same word defined the
content or programs that filled the schedules and airwaves. Now they both
refer to the content that's needed to support
hardware.

Banister has worked in television and film production, multimedia and the
online site Entertaindom.com. He sees a
continuation of the endless cycle of bandwidth constraining content and the
process then reversing itself once supply and
demand equalize. Cable television unlocked dozens of specialty channels and
shows, movies and formats that would never
have been produced otherwise. Similarly, the growth of advertising into
direct marketing and other disciplines underscores how
advertising formats such as commercials and billboards of earlier
generations will not translate on the Web.

After all, he said, previous media couldn't complete a transaction--they
were one-way broadcasts. But an online consumer has
a direct connection to a product or merchant and can buy, sell, trade or
communicate instantly.

"There is a difference between behavioral and technological convergence,"
Banister said. "Comic books, plays, movies are all
forms of storytelling, and there is native programming for each one.
Advertising couldn't support the cable television business.
Why do people think it will support the entire Internet?"


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