The Multimedia Industry (Second Installment)

It is useful to see the multimedia industries as a continuum of "eco-structures" ordered to reflect attribute and common elements. Entertainment companies are grouped at one end of this continuum, those that have productivity as their pillar in the center and those based on communications on the right. This ordering is not arbitrary, each vertical group is related to its neighbor in very important ways. The historical development of transmission-presentation systems is different in terms of cost and technology. Such inequalities are due to basic philosophy differences between groups, each of which is manipulating to position itself as a market leader.

Commercial television is defined as the sector that most strongly defends the development of multimedia. However, although conversion to fully digital multimedia streams is approaching, it still does not reach over-the-air TV transmission and is only now beginning to be used in cable systems (mainly to compress more analog signals through the same system). One of the television rules proposed by the FCC is to force conversion to digital formats that will force those who broadcast on the air to transform their signals – as a requirement to maintain the spectrum they are assigned – integrate the new compression systems that allow transmitting more functions within the same bandwidth and at the same time give them the possibility of offering new interactive data services that form the basis for a further increase in revenue.

Despite being able to provide new information products and services, both interactive television and closely related cable systems base their revenues on providing entertainment. Governments impose other conditions of service and performance, but these industries make their money by bringing fun to the TVs that are in the living room of the houses.

In the beginning, the cable industry evolved to fill the gaps between the set of television broadcasting stations. These gaps were due to geographical obstacles or distance from the transmitting antennas. Since the old cables only retransmitted existing broadcast signals, the new service appeared to be a natural extension of the "food chain" of television services.

The broadcasting companies didn't see it that way; They understood long ago that cable was and still is a threat to traditional TV repeaters rather than an improvement in their business. With cable, fewer transmission towers and repeaters are needed to bring high-quality programming to homes. Entertainment and information networks have been developed in this environment and, unlike over-the-air broadcast signals that are heavily regulated by the government, many cable systems were developed and extended using completely patented technologies.

However, the veiled promise of interactive multimedia capabilities and digital media streams has been unfulfilled due to the lack of consistent business models for new services. No one really knows what services consumers are willing to pay for. Top candidates include video on demand, shopping and home banking, distance learning, and interactive games with multiple participants.

All major cable companies are distributing questionnaires to see if they can corroborate consumer demand for these new types of features. Suggestions for each of these services have led to the creation of dozens of technical working groups in the industry, hoping that standards will emerge that will decrease the risks and costs of adding new services. Meanwhile, almost all cable companies upgrade their wiring equipment and add new channels while still conducting their market tests pending the emergence of a cable super application.

Interactive gaming companies long ago understood that the TV is the best vehicle for bringing home entertainment. By means of a direct connection to the main screens they increase the installed base and simply supply consumers with the only missing feature in commercial television: interactivity. Consumer preferences, budgets and habits profoundly affect the success of all products developed for this purpose. That is, both television and video games are pretentious These are high-impact markets with relatively short product life cycles. It is also true in both cases that they are large sectors where it is possible to gain and lose fortunes in a few months.

Interactive games, once a small part of the large palette of electronic products, grew to the point of forming their own association, the so-called Interactive Digital Software Association (IDSA). This organization is now in charge of legislative initiatives such as mandatory ratings for games and copyright protection – as is the case in other sectors of the entertainment industry.

For years computer products distributed to the home were connected to televisions only as machines for video games, an example is the Apple II. Games appeared especially in the first offers of homemade software and still predominate in the purchases of this type of programs. It stands to reason that devices used in the home and connected to the TV should entertain. Consequently, color, sound and animation have always been an important part of the design criteria for successful interactive products for use at home.

Home computing added new levels of interactivity: a full keyboard, a pointing device, and a storage medium (floppy disks, for example), thus promising to increase productivity. In this way home-oriented computers began to adopt features of business desktop computers or video game machines.

Although the productive capacity of home computers offers a good rationalization of purchase, entertainment (in the form of games on CD) continues to be the main mobile of buyers.

These new home computers break with the old tradition of electronic entertainment by offering their own screen on a monitor for use on a desk. In general, such machines have the same architecture as computers sold for business, but include multimedia capabilities, at a lower cost. Seeking to capture the interest of buyers, manufacturers added large storage capacity in the form of drives for reading CD-ROM discs and cards to produce sound and video. This new kind of computer, like television and video games, provides entertainment and the ability to bring work home – an interesting sales conquest.

Homemade machines along with their desk relatives created the juncture for a new product category: homeschooling. It offers fun and the possibility of productively occupying the children's free time with educational activities that some qualify as the new category of software: "Edutainment" (educational entertainment). A whole series of fun software products, designed to be healthy alternatives to the results of passive television and stupid video games, have made an impact on the market by originating their purchase by responsible parents who want their children to have the best competitive opportunities in school. And it is that they do not only replace groups of unwieldy books (CD-ROMs include dictionaries and complete multimedia encyclopedias). In addition there are some very good games that adults can enjoy when children go to sleep.

For the past decade, the business computer has been the launching pad for entirely new software and hardware empires. The release of each generation of more powerful microcomputers led to the emergence of new software in the early eighties capable of creating documents, controlling finances and handling data, enabling home users who previously depended on centralized service organizations to do their jobs.

The yearning for individual productivity created a great need for new products, many of which were, in their early introductions, expensive, difficult to use and sometimes malfunctioned. However, the advantages outweighed the disadvantages and the market quickly took root and grew. The dizzying revisions of productivity tools and platforms, created a kind of addition among users for having "the latest and the best" versions of the product and established new criteria of sufficiency and professionalism due to the edition of new capabilities and features. For example, shortly after relatively inexpensive, high-quality laser printers hit the market, substandard dot matrix printers became an indicator of an amateur or unprofessional organization. Business computing, both in software and hardware, quickly became a game of: team = status and continues to rise on the backs of real or imagined productivity increases.

The design objectives and main purpose of business computers have always been crystal clear: they are tools for the creation, administration and management of business information and data. These are complex and creative environments that come empty, ready for users to enter their personal data. The information is then backed up and a graphic is produced on high-quality screens or printers.

Users have always tended to operate resistance to multimedia capabilities since the beginnings of personal computing. The move from monochrome monitors to color monitors and conversion to graphical user interfaces took longer than expected because many institutional buyers felt they didn't need color or graphics for their businesses. Gradually, as prices fell, graphics and color capabilities were included at no additional cost. Nowadays it is increasingly common for these conditions to be part of the basic configuration, but the same institutional reaction is achieved: "I do not need video or sound in my business." But desktop computers with multimedia capabilities are becoming the norm for businesses and it's easier to imagine new uses and applications for these products as the installed base of such systems grows.

Since then and confident in the strong heritage as a platform for productivity tools, desktop computers with multimedia conditions moved to the side of supplies from entertainment-based industries, including the development of filming, television and video games.

Today, film producers use digitally powered special effects created entirely on advanced workstations and save millions of dollars in production. Desktop editing systems for television, film and sound now exist at a fraction of the cost of specialized post-production equipment. Despite its use as a creative tool in the entertainment industry, the role of the desktop computer in business continues to be to handle externally generated multimedia data rather than the delivery mechanism of information, objects or multimedia experiences already prepared.

Home computers, which often lack the power of business desktop computers, are occupying the role of "performer" and are increasingly used to present multimedia content that is not designed to be edited, altered or integrated into a productivity project. Rather, this content is usually designed to be assimilated "complete" albeit with a bit of interactivity to navigate through the linear segments of the "content". Therefore multimedia divides the computer family into productivity, platforms based on tools designed to alter the information that is placed in the system and multimedia execution systems, experts in the search and presentation of various types of data in synchronized and previously designed final events. In other words, tool devices and devices for execution.

Note on author: Philip V.W. Dodds is executive director of the Interactive Multimedia Association and has led the NAB Multimedia World conference since 1993.