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Event: Review
Convergence '99: The 5 Burning Questions
September 28, 1999 ITVT Issue 2.34 10/1/99
(Article best viewed with Microsoft Internet Explorer for accurate formatting.)
No Resolution of the "5 Burning Questions" on Convergence...
By Brian Gruber, Principals.com
...at the Convergence '99 conference in Santa Clara. New media conferences are becoming predictable these days. PowerPoint press releases and technical demos with consumer adoption answers seem nowhere in sight. There was a good presentation from Wink about the dramatic reduction in direct marketing and order-taking costs via their system. ICTV prez Wes Huffman talked glowingly about his company's centralized platform...high speed applications, CD-ROM's, and high speed Internet content; though, the ICTV system has been adopted by few cable operators to date. @Home, in contrast, offered an articulate but inconclusive explanation as to why they limit video downloads to 10 minutes. The urbane and well-tailored Eddy Hartenstein presented DirecTV's interactive plans. For the most part, his presentation was short on news but long on intelligence and scope. (Was it his decision to have attendees wait an hour between salad and main course so he could speak uninterrupted?). His claim that DirecTV revolutionized the multichannel TV business is credible, as is his claim that cable operators would not be rolling out digital set-tops and NVOD PPV without the pressure applied by DBS. (At a recent cable show session on VOD, only 3 of the 50 attendees were operators, and one of the three insisted that he had no plans to offer Video-on-Demand because his customers liked flipping channels and had no interest in on-demand content). The four "C's" of choice, convenience, control and connectivity (the first three are old marketing saws) were presented as the basis for new application roll-outs. The fresh DirecTV partnerships with Wink, TiVo and AOL are designed to cover those consumer needs. The community functions of e-mail, chat and buddy lists that AOL will provide onscreen might make for a 5th "C". Hartenstein predicted that the television experience would be transformed from a shared viewing experience to one of shared community. What will drive Americans to buy into converging technology? DirecTV's emphasis was on quality, customer service, and choice and value. With references to Alvin Toffler's Future Shock, he said up to 70% of Americans are uneasy with new technology. When technology goes wrong, when error messages tell you that you've performed a fatal error, we take it personally. And so we demand control, a possible cause of the success of PDA's like the Palm Pilot which allows for ease of use. One last list for successful convergence products, as DirecTV sees it: strong brand recognition; big bandwidth; large caching storage devices; interface with other users; and national distribution. Overheard Nuggets:
- Clicks and Mortar: Increasingly valuable to have a real world presence to be a successful Internet company. The Big are Getting Bigger. Most (overvalued) Internet companies will not survive the shake-out coming over the next two years. It is becoming increasingly difficult to establish a presence in the marketplace by yourself (notwithstanding the recent orgy of intrusive and mostly ineffective ad campaigns).
- Successful companies are building effective ecosystems (i.e. power relationships) around their products.
- Winning technology will not be bleeding edge, but easy to use with minimum user interaction and plug-ins required.
- The Internet is the first end-to-end marketing medium, brand building, retail and service delivered by one medium.
- Personalization and Shared Experience were the themes in the closing content panel. Replay TV promised video-on-demand and continued to promote the ability to skip commercials. The studios have other ideas, I think.
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