A Report from Consumer Online Services II

By Noble, Rick | Information Today, May 1995 | Go to article overview

A Report from Consumer Online Services II


Noble, Rick, Information Today


I had to visit New York City recently, and I took the opportunity to spend a day and a half at Consumer Online Services II, a new conference (in its second year as the name implies) organized by Jupiter Communications. Having now attended more than 50 conferences that are either entirely or partially dedicated to the professional online market (spring wouldn't be complete without a trip to Manhattan for National Online), I can tell you that this was a very different experience.

With rock and roll piped into the main meeting room before and between every session, demonstrations in the exhibit area featuring pornographic robots on the Internet, and attendees ranging from Madison Avenue advertising types to representatives from L.L. Bean's catalog group, I knew I was in for an adventure.

Enter Microsoft

The main event was a keynote address by Russ Siegelman, Microsoft's General Manager of Online Services. Siegelman is responsible for launching the Microsoft Network (MSN), which is reportedly coming to a country near you during the third quarter of 1995. One indicator of the clout that Microsoft is bringing to this market is its plan to introduce MSN in 43 countries and 26 languages and to invoice in 17 currencies, right out of the starting gate.

According to Siegelman, Microsoft has already signed 50 information providers. Although he would not reveal specific royalty terms, he indicated that IPs would "get more than 50 percent."

Microsoft is planning a tiered pricing model for MSN that would include a "base" package with chat services, file downloading, Internet access, and general news for a "low monthly fee and low connect fees." So-called "extended" services would be priced a la carte, allowing content providers to set the end-user price. Providers of extended services will also be able to offer sections of their databases or services for free trial usage as part of the base service.

Much has been written about whether or not Microsoft's ability to embed MSN access into the next release of Windows provides them with an unfair advantage. Whether you subscribe to that view or to the notion that they are simply leveraging their strengths as any business would in a similar situation, the "Big Three" consumer online services are clearly worried.

Three Against One

Following his presentation, Siegelman was joined in a panel discussion by Barry Berkov of CompuServe, Scott Kurnit of Prodigy, and Ted Leonsis of America Online. Each of these senior executives took a turn bashing Microsoft (assisted on several occasions by members of the audience), and all are threatened by the prospect of MSN entering their market. Only Leonsis offered that MSN might do some good for the industry in that they could "change the pricing model" for consumers.

The Big Three and Microsoft were united, however, in their concern as to how the Internet might affect their business over time. …

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