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============================================================================== Seidman's Online Insider Brought to you by NetGuide Magazine < http://www.netguidemag.com > Weekly Summary of Major Online Services and Internet Events ============================================================================== Vol. 3 Number 26 July 12, 1996 ============================================================================== Copyright (C) 1996 Robert Seidman and CMP Media Inc. All rights reserved. May be reproduced in any medium for noncommercial purposes, as long as attribution is given. ------------------------------------------------------------------------------ IN THIS ISSUE - Editor's Note - InternetTV: Myth or Reality? - PointCast: This Is CNN? - Miscellaneous - Subscription Info Editor's Note ============= Let the copy editing begin. ... This week please welcome Bernadette Barone, who will begin copy editing the newsletter on a regular basis. Bernadette has years of experience as a copy editor, so if she misses anything besides where I have deliberately butchered the English language, please cut her some slack. At least the first few weeks! InternetTV: Myth or Reality? ============================ There's been a lot of talk lately about devices that let you surf the Internet from your television. While this is a slightly different variation on the NetworkPC theme, I wasn't very big on the promise of surfing the Web on TV. The main source of concern was that high-resolution graphics intended for a high-resolution monitor simply don't look very good on a regular television. Things have changed. WebTV Networks Inc. < http://www.webtv.net >, a privately held start-up founded in June 1995 by three former Apple Computer employees, recently announced that Sony and Philips had licensed their set-top box, which hooks up to the television, and would begin deploying it this fall. While I haven't yet seen WebTV, what separates it, judging by almost all the feedback I've gotten, is that it makes the graphical Web pages look good on a television. "They have the best approach I have seen to putting the Web over a TV," said Jupiter Communications analyst Adam Schoenfeld in a story by Reuters. "They have an excellent software/hardware fix to the screen-resolution problem. They have overcome one basic hurdle in that the Web does not look terrible over their service." *What It Is* There are two components to WebTV: a patent-pending design for making set-top boxes and an actual online service. The boxes will be equipped with a 33.6-Kbps modem, software that eliminates flicker on the TV screen, and digital-quality audio and video output, plus, what's most interesting, the design reference calls for an ISO Smart Card reader that will read credit and ATM cards. Cable modem functionality is planned for the future. Users of WebTV will be able to browse the net with WebTV's remote control. The online service portion will support up to five users, and each user will have an Internet e-mail address, a favorites list and customized settings. E-mail can be typed with a virtual on-screen keyboard or with a planned optional full remote keyboard. The design of the box calls for it to be equipped with Flash ROM so that software enhancements and updates can be made automatically over the network. In addition to licensees Sony and Philips Consumer Electronics, WebTV has partnered with Concentric Networks (for the net connection), Excite (which will provide a specialized version of Excite for WebTV subscribers), Progressive Networks (RealAudio), Spyglass (for its SurfWatch child-protection software), HeadSpace (music and audio effects) and Integrated Device Technology (MIPS RISC microprocessor). WebTV plans to aggregate a lot of content for its online service. The company also is placing heavy emphasis on local content, which will be presented automatically to users. As for advertising, WebTV plans to provide "smart advertising" based on user interests and geographic location. I realize this sort of advertising raises privacy concerns, but focused advertising could be a very useful service for the end user. The ATM/credit card reader will have online retailers salivating. Perhaps rightfully so. Many people raise security concerns as an obstacle to purchasing via the net. People don't want to type in their credit card numbers. Though I'm sure WebTV will provide the best security it can, I think when people see a card reader they'll feel more secure than if they were typing in their credit card numbers. When I'm paying at the gas station and I'm paying at the pump, I have never once thought, "Huh, I wonder how secure this is." I know I probably should, but I don't! Besides, there's something about the words "Insert card and remove quickly" that really makes me feel like I'm buying something! *Will WebTV Catch On?* The good news is that WebTV has, I believe, an excellent premise. Steve Case, Bob Massey and the rest of the online executives are constantly talking about the fact that only 11 percent of homes in the United States use an online service. A WebTV set-top box, if priced inexpensively enough, could go a long way toward getting into the 89 percent of homes that don't have access. Because of competition between licensees Philips and Sony, pricing for the box has not yet been announced. In light of comments from Steve Perlman, president of WebTV Networks, we can be pretty sure the price will be less than $500 (he basically said $500 was too much for most consumers). Pricing for the box is rumored to be anywhere between $150 and $400. Around $150, you're talking about a true consumer product in the price range of a video game set. While I'm sure there would be more demand at $150 than at $400, I'm not sure there would be lots of demand at either end of the pricing spectrum. Ultimately, I think, for the box to really infiltrate the home its price would have to be absorbed via the monthly subscriptions to the services. Not everyone thinks WebTV will catch on. "It's a non-natural situation," said Peter Krasilovsky, an analyst with Arlen Communications, in a story by Reuters, referring to browsing the Internet with a remote control instead of a mouse. "I think that people who are really interested in the Internet will not be interested in this." I have a great deal of respect for Peter Krasilovsky and he's been a valuable resource to me in writing this newsletter. But I have to say, I "non-concur." (Non-concur was a term I learned at IBM. IBM seemed to be a breeding ground for making up words and phrases, turning verbs into nouns, etc. "Non-concur" seems to be for those times when saying "I disagree" just isn't strong enough!) I'll give Peter the benefit of the doubt here because he probably said a lot of things and only that little snippet got used. I agree, that for those of us accustomed to the keyboard and a mouse, the remote would indeed be unnatural. But the premise of WebTV excites me not because I think those of us who have invested thousands of dollars in computer systems will run out and buy them. The premise excites me because maybe, just maybe, millions of people who have never bought a personal computer will take a look at it. For them, there will be no unnatural behavior -- they've never used a mouse. For most, I'm guessing, the remote control will seem quite natural. A lot of this will boil down to how WebTV is marketed. But I believe that if they market WebTV in such a way that people think they have to have it, it could be a big success. As for me, I could definitely imagine sitting on my couch with the infrared keyboard and doing e-mail. If the Web is slow, hey, it will finally give me a chance to utilize the picture-in-picture aspects of my television. I'll have something to watch while I wait (besides a progress meter!). *Issues* For those of us who remember the joy of upgrading from a 300- to a 1,200-bps modem, 33,600 bps sounds REALLY FAST. But there are a couple of problems with this. For one, I have a 28.8-Kbps modem now, and the times I get a true 28.8 connection are rare. More typically, it's 26.4. I think for the most part, this has to do with the quality of the local phone lines where I am. But, if I can't make a 28.8 connection on a regular basis, I'm pretty sure I won't ever see 33.6 -- unless I move. A 28.8-Kbps connection is plenty fast for most things. Unfortunately, the Web is no walk in the park at 28.8, nor will it be at 33.6. When you're alone in the office at midnight and nobody else is around, with the full bandwidth of a T1 (roughly 1.544 mbps) the Web is fun. At 28.8 or even 33.6 there will be a lot of waiting. WebTV says it's designing enhanced caching that will be faster than what's available today, but how much difference this will make remains to be seen. With a cable modem, though, you're potentially talking about a very different-color horse. The premise of the cable modem was initially that it would hook up to personal computers. But if you can get good graphics over the TV, with cable modem speed ... WOW! It seems like the cable companies might want to become licensees too. WebTV will offer automatic dial-up and configuration, which should make it easier to hook up to the net than via your average net provider. Billing, regardless of who you got your box from, will be handled by WebTV. I'm told that the "start-up" page is hard-coded and can't be changed. While the configuration defaults to the Concentric Network (a great deal for them, if this takes off), the service should work with any Internet provider offering TCP/IP connections. How easy or hard it will be to configure for other network providers remains an unknown. While WebTV users will be able to automatically get updated versions of the browser, they won't have access to the myriad programs available to PC users. Software developers will have to develop code especially for WebTV. Let's say there's a really cool new VRML browser for Windows and Mac environments -- WebTV users wouldn't be able to get it unless it was developed specifically for them (probably via an expansion chip add-on). This pretty much ensures that WebTV users will be running behind the PC crowd until things stabilize and new software development for PCs slows down. Based on the marketing material available at the WebTV Web site, the company has patents pending on just about all its software to protect its intellectual property. WebTV is even going for the patent on its MessageWatch technology, which will periodically "wake up" WebTV when it is off to dial in and check for new e-mail, lighting the message LED on the set-top box to notify the user. The video display, caching ... whatever, it's all patent-pending. *Long-Term Impact on Online Services* When some of you go to bed, your biggest Internet worry right before you doze off is probably whether the e-mail you sent will reach the intended recipient. Me, I worry about all that, and right when I'm about to doze off, I think, "Well, if WebTV succeeds, what does that mean for the online services?" Here's the strange part -- this thought is so provoking for me, I don't mind that I can't get back to sleep. I just wish there was someone I could call at 1 a.m. to discuss it! If I'm CompuServe chief Bob Massey or America Online chief Steve Case, or even Microsoft chief $18 Bill(ion) Gates, I'm definitely thinking about whether WebTV will boom or bust. In the case of Bob Massey, it's a dilemma. The good news is that CompuServe is moving to the Web. The bad news, at least in this case, is that it's being done via Microsoft's "Normandy" (a set of servers that provide online service functionality via the Web/Internet). While WebTV supports HTML, MIME and some other open standards, it probably won't, at least initially, support the protocols used by Normandy for forums and chat. But you have to wonder if Massey's thinking, "I wonder what it would take to put 'WOW!' on one of those set-top boxes." With Steve Case, he's gotta be in somewhat of a bind on this one. Massey and Case both have to want the premise to succeed because it may give entry to a lot of the 89 percent of the market that doesn't seem to care. On the other hand, WebTV is not AOL. Case wants AOL to be the No. 1 service. Does Case hope, in the case of WebTV, that it doesn't go well -- not because it's not a good premise, but because the presentation and offerings weren't compelling to end users? Perhaps. One thing is clear, though. If this technology takes off, it will be labeled as yet another online service killer. Unless, of course, the online services license WebTV, another technology partner, to create set-top boxes for THEIR services. You have to figure that the online services have been thinking about this anyway. As for Microsoft. Well, the browser wars between Microsoft and Netscape are in full swing. But Microsoft may view WebTV as another Netscape. Another company beating it to the punch on something it wanted to do. A company founded by three former Apple Computer guys, no less. Probably not a lot of love for Microsoft among them. *I'm Rooting for This Technology* Whether you buy into the premise of Web via TV or not, you should root for it to succeed. Some would say content has become a commodity. With the wealth of free content available on the Web, it's sometimes hard to argue with that notion. But there's a lot of good content out there. If the people and companies putting the content up for free can't find a way to support their efforts via advertising, they'll either start charging for their content or stop producing it on the Web. I don't want to see that happen, so I'm definitely in favor of anything that could potentially bring more users online. All of the content currently available cannot sustain itself based on advertising support without more users. *Related Info* You'll be reading a lot about services that provide the net via a TV, as well as services that try to marry the PC and TV. Intel's "Intercast" is a technology that marries TV and Web by transmitting HTML on a part of the broadcast signal known as the vertical blanking interval (VBI), currently used to transmit things like closed captioning. With Intercasting, one window would display normal television broadcasts while another window would display a Web page of information related to the broadcast. NBC plans to Intercast the Olympics later this month. CNN also plans to use Intercast technology. MTV recently announced its new M2 channel would take advantage of Intercast on a 24-hour basis. One example of how MTV will use the service is while a video is showing, it'll "Intercast" tour dates for the performer in the video. Meanwhile, Sinclair Broadcast Group has moved out of the test phase with a technology similar to Intercast, called Supercast. Like Intercast, Supercast takes advantage of the VBI. Unlike Intercast, Sinclair plans to use its technology not for broadcasting television-style content, but for delivering high-speed Internet access. In recent tests in Baltimore, Sinclair claims it achieved delivery speeds of nearly 100,000 bps. While Intercast currently works only with Netscape's browser, Sinclair claims its technology will work with any browser. Both Intercast and Supercast require a dial-up connection via modem to transmit information back to the server. PointCast: This Is CNN? ======================= PointCast < http://www.pointcast.com > and CNN Interactive < http://www.cnn.com > announce a partnership where news from CNN Interactive will be delivered via the PointCast Network (PCN) software. This is a major deal for PointCast and a pretty good deal for CNN, too. Beginning this fall, existing PCN users will begin receiving CNN Interactive news via PCN. A co-branded version of the PCN software will also be available. A channel for CNNfn (financial news) will be available on PointCast this fall. A channel for CNNSI (a joint venture between CNN and Sports Illustrated) will be available in the future. Also, the companies agreed to a major marketing campaign that will include commercials for PointCast on Turner Broadcasting cable channels (CNN, CNN Headline News, WTBS, TNT, etc.). CNN and PointCast said they will make "significant investments" in staffing and technology with the goal of optimizing the presentation and delivery of CNN's news resources via PCN. No financial details about the investment were available. Both companies indicated it would develop technology to "present CNN news in the most compelling and unique way." "We chose to partner with PointCast because this application represents a new way for marketers to reach the full spectrum of computer users around the world with visually compelling content as well as high-impact advertising," said Daniel Stone, senior vice president and general manager of Turner Interactive Marketing and Sales. "Advertising on the PointCast Network is effective both as a stand-alone marketing tool and in conjunction with Web site advertising." It seems like no matter whose office I'm in these days, I see the PCN screen saver running. The real bonus for CNN here may be expanded access to distributing its information within corporations. CNN hopes to penetrate the corporate market, and the alliance with PointCast makes sense. For PointCast, CNN is a major brand to have on board. It's the kind of thing that, along with content from Time-Warner, the Los Angeles Times, The Boston Globe and others, will get investors excited come IPO time. Miscellaneous ============= The newest release of the beta for MICROSOFT'S INTERNET EXPLORER (IE), scheduled to be released this week, has been pushed back to next week. ... Meanwhile, the Microsoft software project code-named "NASHVILLE," which among other things will let Windows 95 users use the Web browser as the desktop "shell," has been redubbed "IE 4." This makes me wonder if Microsoft will work on making the "browser as a desktop shell" technology available to Windows 3.1 users. ... First the Internet joint venture between MCI and NEWS CORP broke down, then News Corp sold DELPHI. Now News Corp has parted with a substantial piece of Iguide (the remnant of the joint venture with MCI). Connecticut-based ZIPLINK LLC has purchased the Iguide customer-support-center assets and Internet infrastructure from News Corp for an undisclosed amount. With the purchase, ZipLink will become an ISP in 27 metropolitan areas. ZipLink will offer unlimited access for $16.95 a month. ... Meanwhile, GTE is the latest of the telephone companies to enter the ISP market, announcing immediate availability of service in more than 250 cities (representing 46 states). Users can opt for $8.95 a month for five hours of service, with additional hours billed at $1.95 each, or $19.95 a month for unlimited service. ... The search engines continue to take it on the chin in the stock market: INFOSEEK shares were priced at $12 at the time of its June 11 IPO. The stock got as high as $16 before settling comfortably in the single digits (Infoseek closed the week at: $6.25). Meanwhile, YAHOO dipped to an all-time low of $16.38 on Wednesday and this was BEFORE it released its quarterly results, where it showed a loss of $1.3 million ($.05 a share) for the quarter, which was $.02 a share better than analyst predictions. Stock Watch for the Week Ending July 12, 1996 ============================================= This % 52 52 Week's Change Week Week Company Name Ticker Close 1 Week High Low ============ ===== ====== ===== ====== ==== @Net Index IIX $232.37 -5.4% $273.13 $185.76 America Online AMER $38.50 -6.4% $71.00 $22.25 Apple Computer AAPL $18.06 -7.4% $49.75 $17.25 AT&T T $58.84 -1.9% $68.88 $51.38 BBN Corporation BBN $18.13 -13.2% $48.75 $17.38 CMG Information Svcs. CMGI $21.13 -15.5% $50.25 $9.63 CNET CNWK $15.88 -9.3% $21.25 $15.75 CompuServe CSRV $17.00 -17.3% $35.50 $16.50 CyberCash Inc. CYCH $36.25 -24.1% $64.75 $24.50 Excite Inc XCIT $6.88 -5.1% $21.25 $6.25 FTP Software FTPS $7.00 -1.8% $40.63 $6.63 H&R Block HRB $28.50 -10.2% $48.88 $27.75 IBM IBM $95.31 -2.6% $128.88 $83.13 Infoseek SEEK $6.25 -27.6% $16.50 $6.25 Lycos Inc. LCOS $8.13 -18.7% $29.25 $8.00 MCI MCIC $26.13 3.0% $31.13 $20.88 Mecklermedia Corp. MECK $16.50 -17.0% $24.50 $8.50 Microsoft MSFT $112.38 -5.1% $125.88 $79.88 Netcom NETC $22.50 -10.0% $91.50 $19.22 NetManage NETM $10.25 -6.8% $34.00 $9.38 Netscape Comm. Corp NSCP $48.50 -16.7% $87.00 $22.88 Open Market OMKT $16.13 -25.0% $42.25 $14.25 Oracle Corp. ORCL $37.25 0.3% $40.38 $23.31 PSINet Inc. PSIX $9.50 -8.5% $29.00 $6.75 Security First Nat'l SFNB $24.75 -25.0% $45.00 $24.75 Spyglass Inc. SPYG $18.00 -9.5% $61.00 $16.50 Sun Microsystems SUNW $50.50 -9.4% $67.13 $19.75 UUNET Technologies UUNT $61.75 -5.0% $98.75 $24.25 VocalTec LTD VOCLF $6.75 -24.0% $20.75 $6.25 Yahoo YHOO $17.50 -12.5% $43.00 $15.50 Subscription Information ================== To subscribe to this newsletter by e-mail: Send an e-mail message to: LISTSERV@PEACH.EASE.LSOFT.COM In the BODY of the message type: SUBSCRIBE ONLINE-L FIRSTNAME LASTNAME Example: Subscribe Online-L Robert Seidman If you wish to remove yourself from this mailing list, send a message to: LISTSERV@PEACH.EASE.LSOFT.COM and in the body of the message type: SIGNOFF ONLINE-L . A Web version of the newsletter is available at: <http://www.clark.net/pub/robert>.