Convergence and the future:

Any discussion about the future of the Internet is fraught with theories, visions and much economic speculation. As one pundit put it, you may as well ask which way the universe is headed. And while there are few absolutes in speaking...
August 1, 2000

Any discussion about the future of the Internet is fraught with theories, visions and much economic speculation. As one pundit put it, you may as well ask which way the universe is headed. And while there are few absolutes in speaking of the universe or the Web, one thing is for sure: Both are expanding.

We asked various gurus to talk about the future of convergence with an eye on evolving technology, the shifting viewer’s experience and variations on existing revenue models. Here’s what they had to say:

When it comes to delivery, Steve Rolufs, director of new media at Toronto-based

kidcaster YTV, sees a new industry standard. ‘The challenge now is the fact that different satellite and cable providers have different set-top boxes, so what do you develop for? I see that in about three years, there will be true standardized product convergence, where old TV standards come together with ATVEF interactive TV standards and video-on-demand standards.’ Of course, such universal standards will have to keep pace with the quick-change field of technological platforms.

Sean Wargo, an Internet analyst at PC Data, sees rapid computer-like proliferation in his crystal ball. ‘The current percentage of households that have a PC is 61% in the U.S.,’ he says. ‘PCs in their

current desktop format may never get above 80%, but it is likely that computers in one way, shape or form, either through hand-helds, laptops or other more portable and scaleable technology, will reach the same levels that phones, microwaves and televisions are at today-near 100%. We aren’t there yet, but in another five years? It will probably be a different story.’

But how will such technological advances affect the viewing experience for kids? ‘I definitely see our guests participating in the

storytelling process,’ says Dan Sherlock, VP of marketing for Disney Online. ‘I see immersing our guests in the

storytelling, letting them decide the outcome of an off-line story or maybe the reverse-maybe they find the outcome of a story off-line and they go on-line to create the ending.’

But former Disney exec and U.K.-based on-line producer Billy Macqueen says you have to temper what’s technologically possible with what kids want. ‘A new genre will arrive,’ he agrees, ‘but if you look at drama now, kids don’t really want five different endings. Some genres of children’s programming won’t easily fit into the new era of connectivity. But people who have been making magazine shows are going to have the right instincts and the right experience. They know what keeps the audience coming back.’

For his part, Rolufs doesn’t see a convergence of viewer experience at all. ‘Pure aggregators [content providers] have to realize that there are two types of experience-passive and active-and a convergence of the two is not going to happen,’ he says. ‘People will always want a lean-back, passive viewing experience as well as an active one. It’s like going out to a restaurant as opposed to going shopping and doing the cooking at home: People like to do both.’

Sam Register, VP and creative director of Cartoon Network Online, says format-wise, we still have a ways to go, but new formats that are better suited to the new media will eventually have their day. ‘The Web changes every year,’ he says. ‘The sitcom was not invented until years after television was invented and I think we’re trying to figure out what the interactive version of the

sitcom is.’

Of course, ultimately, shifting platforms mean shifting revenue models. And Dan Fill, director of interactive at Decode, says that such evolving models may not do much for content quality: ‘In two years time, there will be more digital channels, and unfortunately that means that the amount of money available from advertising and for production will go down. I think we’ll see a greater number of lower budget productions.’ On the bright side, he adds that the best content will survive the dip in quality.

Uncertainty about the future has also had the effect of prompting content providers to keep their rights close to home. Sylvia Rothblum, member of the board responsible for production at EM.TV & Merchandising, outlines their current policy: ‘Before, you used to sell [windows of] five to seven years-maybe four or five runs. Now we sell for maybe one year, one run. Because no one can predict what the environment will become, we try to keep the rights, not tie them up for long. We prefer to be more flexible to all future changes. You’ll get a lower license fee, but instead of selling to five channels, you’ll have maybe five hundred.’

When it comes to financing, Macqueen sees even more fragmentation than exists already. ‘I think in the future, it’s all about cooperation,’ he says. ‘Programming will be made with an allegiance to someone who’s brilliant on WAP phone technology and has the service to power that, so you’ll have the people who are the content experts and then you’ll have the people who want their brand tied to that. I think there will be far more players involved in revenue models. I think financing will be far more fractured.’

Hans Peter Vriens, member of the board at EM.TV & Merchandising, serves it up straight regarding deal models and future of the Internet. ‘I don’t have a clue,’ he says. ‘Anyone who tells you otherwise is lying. I only know one thing: There are people who own content, and there are viewers who want to see content, and in the middle there are all these platforms that deliver it. Those who own the content will always be in a good position.’

Disney’s Sherlock agrees that premium content will equal revenue: ‘As capabilities to provide more pure entertainment content increases, in three to five years, I think you’ll find consumers more willing to pay a premium for that content. Obviously as more people come on-line, advertising revenues will increase as well. I think we’re still in the very early stages of people feeling comfortable conducting transactions on-line. When consumers get more comfortable with that, I think you’ll see e-commerce ramp up, and our travel bookings as well.’

Decode’s Fill sees other advantages coming down the road for content creators. ‘I think we’ll start to lose the restrictions on the length of a piece of content,’ he says. ‘You’ll be able to have shorts that are only 15 seconds, and alternately, there will be content for people who want to have an extremely long, in-depth experience that goes on for hours.’

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