Magazine article American Journalism Review

The Videotex Debacle

Magazine article American Journalism Review

The Videotex Debacle

Article excerpt

WHAT WORRIES ME MOST about the recent rush to embrace new information technology is that it happened once before. More than a decade ago, corporate excitement over online services--then called videotex--was palpable.

"A giant home information industry is taking shape in the plans of hundreds of companies...," said Business Week in June 1981. "By 1990, they are confident that videotex will be big business." By the mid-1980s, however, after blowing at least $100 million, those firms closed down their videotex operations.

How could giants like Times Mirror, Knight-Ridder, Warner and Time have been so wrong?

Everyone had been seduced by the hype. "Now, right at home," stated a 1985 brochure for Times Mirror's Gateway, "you can read the news, hot off the wire. You can pay a bill. Send a note. Shop the stores. Plan a party. Do your banking.... And you'll have an unlimited resource for answers to thousands of questions."

But instead of becoming a "marketing edge for the new world," videotex bombed, collapsing into die-hard CompuServe and fledgling Prodigy. As a medium, it proved to be slow, shallow, intrusive, unreliable and overpriced. Those of us on the news side of the business lamented its passing because it was the fastest, most flexible news delivery system ever invented. Many of us thought the media companies backed out too soon, wasted their money and learned no lessons.

What were those lessons? And will the communications industry spend the money and have the patience to be successful this time around?

THE RISE AND FALL OF TIMES MIRROR'S Gateway offers some answers. Our company launched its videotex project in early 1982 with market tests in Orange County and the Palos Verdes peninsula, both places with a relatively large number of upscale, computer-hip Californians. We formed a staff of 60, built a database and managed it with software developed by a firm in Canada, where videotex had gotten an early start.

Telephone lines connected our computer to a decoder box attached to test participants' television sets. Viewers used a remote pad similar to a cable TV control, except ours had an expanded set of characters, including the alphabet. They could retrieve information by issuing various commands.

The market test of 300 households was designed to demonstrate the potential of the new medium. We programmed our computer to record what each family member was using from the database and how much time was spent with it.

We had to view these results with caution, of course, because we were never sure that participants were signed on to the system under their own personal code. And since test users didn't pay, much of our research turned out to be of dubious value. The test did prove there was a demand. But it didn't tell us much about what subscribers would want, how much they would pay, or how much frustration they would tolerate from clunky technology and advertiser intrusion.

Nevertheless, Times Mirror decided to continue. We designed a commercial database for a mid-1984 debut that offered news, entertainment and restaurant information, E-mail, shopping, banking, games, reference data, and travel

services, including flight information and booking services.

All of this came in gorgeous color with clever graphics. It was remarkably advanced for its time--perhaps too advanced. Many people, when canceling the service, said it wasn't worth the cost.

Undaunted, we continued our research into 1984 and 1985 with more productive results: The data told us what interested paying subscribers. Usage figures and surveys demonstrated that news consistently received the highest ratings, so we beefed up the news budget. Ultimately I oversaw a staff of eight full time editors and a corps of stringers. The Los Angeles Times assembled another seven editors and some part-timers to edit and code various sections of the Times for our use. …

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