Given the recent collapse of the TCI/Bell Atlantic merger, it wasn’t surprising that the viability of how the computer, communications and entertainment industries intersect on the information superhighway was a topic for discussion among panelists at the Converging Industry Panel Wednesday at Intermedia ’94.
Moderated by New York Times technology reporter John Markoff, the lively meeting featured appearances by AT&T’s Robert Kavner, Silicon Graphics Inc.’s Tom Jermoluk, Viacom Broadcasting’s Edward Horowitz and America Online’s president and CEO Steven Case. It touched on a number of subjects, including the computer industry’s overall escape (so far) of government regulation, and speculation on what Microsoft’s role in the interactive world might be.
But with last week’s collapse of the merger between Bell Atlantic and Tele-Communications Inc. still fresh in many people’s minds, the subject was much-discussed by the panel’s participants, all of whom insisted it wouldn’t affect them.
“The focus on the megadeals takes the focus off what’s really happening in the industries,” Case said. “You’re not going to wake up and have it all there in place. This is a slow, steady growth that is not based on one deal. The commercial online services are going to help fill the void. That is what is moving us toward a connected world.”
Horowitz, Viacom’s chairman and CEO, agreed, adding, “The convergence process is still on schedule. The fact is, things are still moving along, standards are evolving and people are starting to put their plans together.”
Kavner, executive VP and CEO of AT&T’s Multimedia Products and Services, said that because the merger forced AT&T to look at the two companies as “competitors ,” AT&T had to figure out a way to position themselves against the companies, something they are still doing.
“We went through a lot more detail within these areas in our companies when we thought the merger was a reality,” Kavner said, “and we’ll continue on the same track as we have been on.”
Asked about filling the void left by the collapse of the deal, Case said that he sees it falling into the hands of savvy entrepreneurs.
“This is going to be a businessthat is run by people who create interesting services,” Case said. “There’s more divergence than convergence. Whether they merge or not won’t have as dramatic an impact as people think. It’s not about talking to your TV, but to other people. It’s really about the services.”
Discussing the computer industry’s freedom from the long arm of government regulation, Horowitz said it’s an issue that will have to be dealt with by the technology companies.
“There’s going to be activity in Washington,” Horowitz predicted. “The industry hasn’t dealt with the lawmakers, but they are going to have to. There is going to have to be major planning in that area.”
“I look with some befuddlement that there has been almost no regulation,” Silicon Graphics’ Jermoluk added. “But it will happen and we better be ready for it.”
Using the family home as an analogy for comparing the TV set-top device to online service worlds, Horowitz said the TV set-top device is “living-room driven,” while the online services, because they need the aid of a computer, are “den-driven.”
“What we need to do,” Horowitz said, “is take down the wall that separates the living room and the den. While our focus starts on television, the challenge is to develop a portfolio of products that will combine both areas.”
Asked about Microsoft’s low profile so far, Kavner responded, “They’ve been lying in the weeds a lot. Everything that they are doing is well-focused. I expect them to come forward with software for video servers. I wouldn’t be surprised if they come out with an online service.”
Kavner was also asked about the somewhat controversial remarks he made at January’s Winter Consumer Electronics Show, where he went on the offensive against cable companies for what he called their “closed system of providing content,” in which they decide what’s going to be broadcast on cable.
“The reaction was that AT&T was attacking the cable industry, and I wasn’t.” Kavner said. “But I think we need to be careful that the model that made the cable industry, where they control what is on the screen, is not transported to the computer online services.”