Calling the present cable industry “a closed access, non-competitive marketplace,” AT&T’s Robert Kavner told an audience of several thousand at the Consumer Electronics Show that the cablers’ way of doing business will not work in the emerging arenas of interactivity and multimedia.
“We believe today’s cable industry model of business, where they primarily serve as gatekeepers, would stifle commercial and creative potential if it were re-created in the new interactive multimedia world,” Kavner said. “We believe it’s a threat to the very survival of the consumer electronics industry.”
Thursday’s remarks by Kavner, executive VP and chief operating officer of AT&T’s Multimedia Products and Services, came during his keynote speech that officially kicked off this year’s CES Show in Las Vegas.
“A good way to understand the ramifications of the cable industry’s way of doing business is to talk to TV producers, who’ve tried for the past 20 years to get their ideas and programs through the industry’s gate,” Kavner said. “It’s roughly akin to picnicking with a tiger. You might enjoy the meal, but the tiger always eats last.”
Referring to what he called an “open access” model, where there’s a competitive marketplace that promotes people connecting with people — which many believe will be the cornerstone of interactivity — Kavner pointed tothe success of CompuServe, Prodigy and almost 50 other telephone-accessed service networks that have more than 7 million subscribers. Four million of those use the services from their homes, accessing shopping, and other interactive travel services.
“Those are prototypes of the open access model that we believe is the way to go,” he said. “That is what is going to stimulate a bigger artistic, scientific and economic revolution for the 21st century than the Industrial Revolution did for the 20th century.”
AT&T is part owner of ImagiNation Network, the industry’s only dedicated gaming network, and the company is working to develop new services and focusing on interactivity.
Kavner was also critical of the cable industry’s use of the rental set-top box model because it constrains consumer choices on hardware and software. That, he contended, will push the consumer electronic industry into making low margin monitors and accessory devices.
“Under their plan, the user interface that goes into the consumer’s home will belong to them,” Kavner said. “The potential of interactive networks is not found in 500 pre-programmed channels.”
As a primitive model of what Kavner said interactivity should be, he pointed to the introduction of 800 toll-free services 26 years ago, which he said now accounts for 40% of total calls — or 12 billion calls — made last year.
“The success of the toll-free network … shows that Americans have learned to use the network for transactions — that’s why it is a precursor for interactive multimedia,” Kavner said.
While admitting that “the communication industry’s infrastructure is complex, ” Kavner said access is simple — a touch-tone pad.
“Running parallel is the entertainment side, whose distribution into the home is the purview of the cable companies — today bolted to end users,” Kavner said. “Consumer access to entertainment content is rigidly orchestrated. To get content onto cables, content owners must cut a deal with the powerful tigers of the cable industry.”
Kavner used his Keynote speech to announce the AT&T PersonaLink Services, which he said will be the cornerstone of the company’s multimedia family.
The services are the first network-based implementation of what Kavner called “intelligent assistants”– software programs attached to electronic messages that users will send into AT&T PersonaLink Service’s enhanced network service.
Customers who want to access those services will do so with a personal hand-held communicator using a new technology, Telescript, a communications language developed by Silicon Valley company, General Magic.
Both Sony and Motorola are partners in the General Magic alliance and both plan to introduce personal communicators with Telescript technology in 1994.