Data Broadcasting: New Partnerships in Information
Don Simkovich (Editor: Veronique Autphenne)
Data broadcasting has led to alliances between new information companies and existing information companies such as broadcasters. This data specific information flow is used on an institutional and individual level.
OVER CABLE AND VIA AIR
Data broadcasting sends information to a mass audience over a broadcast network, delivered by cable TV, FM radio, direct broadcast satellite and the Internet. A PC or a television set-top box can be used to access the network. A system developed by Norpak is the Internet VBI Distribution System sending information to PC users over the Vertical Blanking Interval of any standard TV signal. Internet data is selected, encoded, broadcast via the TV signal, then received, decoded, stored and automatically updated on the end user’s PC hard drive. Norpak calls it the ‘fast growing telecommunications alternative for point-to-multipoint data delivery’ (www.norpak.ca/). Data broadcasting is practical since the cost of storing information is inexpensive; meanwhile, network bandwidth is scarce and expensive. Consumers have the advantage of ease of access with multiple delivery systems. ‘Data broadcasting avoids networking bottlenecks and dumps the information people want into inexpensive data repositories’ (Gurley 1998:142).
An infrastructure has existed for data broadcasting. In 1995, WavePhore was developing a system to send data at 1 megabit per second. WavePhore’s new satellite network in Europe can transmit data at more than 2 megabits per second. Broadcast channels have the ability to handle 32 megabits of data per second.
BUSINESS AND FINANCE
In early 1995, WavePhore, Inc tried to convince broadcasters in the United States that their existing technology made it possible to compete with cable, telephone, and satellite to deliver data. Another company with 1997 revenue of $92.4 million, Data Broadcasting Corporation (DBC) sends financial updates to financial institutions and individual investors. The company now has thirteen different services including agriculture, legislation and sports scores. DBC also teamed up with CBS Broadcasting with the debut of MarketWatch in 1997 for the Internet. It ‘delivers nearly two million pages of financial information every business day to more than a quarter million people’ (CBS MarketWatch 1998).
WavePhore Networks, a division of WavePhore, Inc operates European satellite networks from London, with additional operations covering Asia and Latin America. ‘Now we can offer turnkey data broadcasting across Europe and North Africa,’ said Timothy Bruske, Vice President of WavePhore Networks. They provide information for companies like Reuters and Associated Press. Another division, WaveTop, will provide multimedia information and entertainment to home PCs (Press Release 1997). WavePhore delivers high-speed transmissions to 80,000 end users worldwide. DBC delivers real time quotes globally to 37,000 subscribers.
The Telecommunications Industry Association reported that data transmission is causing a surge in the telecommunications market, which grew by more than 11 per cent in 1997 with revenues of more than $406 billion (http://www.tiaonline.org/pub/98-09.html). ‘Spending on emerging technology equipment . . . grew by 60.4 per cent to $3.9 billion in 1997. As bandwidth requirements in the workplace expand, spending on emerging technologies should continue to grow rapidly’ (http://www.tiaonline.org/pub/98-09.html).
THE TARGETED AUDIENCE
Professionals handling financial portfolios, journalists, and individuals wanting instant access to sports scores are users of data broadcasting. The leading data broadcasting companies target clients ranging from financial institutions to broadcasters with market plans to increase output to home PCs. DBC’s services can cost $3,000 a month for financial professionals. However, novice investors can access a tailored service for $29.95 monthly. News professionals pay between $250 to $700 monthly. ‘Commodity content like stock prices, sports scores, news reports, and weather clearly belong on such a network. This information is plentiful and free and there is no reason not to put it in the air where everyone can get to it quickly’ (Gurley 1998:142). Datacasting is advantageous to multiple users saving them time and interference. ‘Information that has been datacast to the end user is automatically updated . . . The end user can access and browse the data at any time with any Internet browser, and without having to tie up a phone line’ (VBI Net, Norpak).
WILL THEY BUY IT?
Existing infrastructure and the ability to manufacture new technology does not guarantee buyer loyalty. WavePhore tried to win the business of broadcasters in the United States in 1995 by convincing them that data broadcasting could provide them with additional revenue. However, by late1995 no deals had been closed with stations. ‘WavePhore is facing an uphill battle convincing U.S. stations that its new technology will work and be profitable for them’ (Beniker 1995:40). Interactive News Network’s Channel 11 was committed to integrating Internet with TV. However, critics see clearly defined functions for TV and the Internet: TV provides entertainment; the Internet provides information (Dempsey 1996). Competitive pricing may be uppermost with consumers. Marcus Cable’s digital modems are an important to link homes with digitized broadcasting. However, a Web discussion was largely negative. ‘I don’t think you’ll have to worry about having too many customers,’ e-mailed S. Ringley (1997). ‘At that pricing many people will be able to rationalize the cost/performance ratio of standard analog modems.’ A cable modem, network card and the installation will cost $499. Monthly charges will be $49.95.
On 3 March 3 1998, BellSouth Chief Executive Duane Ackerman called for ‘a regulatory moratorium’ to work more effectively with computer companies in transmitting data. ‘"Telephone and computer companies share a common destiny," said Ackerman, noting that the stock market performance of computer shares is closely linked to communication industry developments. . . . Ackerman criticized FCC and state regulations that directly or indirectly limit the amount of communications traffic phone companies can handle’ (http://www.bellsouthcorp.com/proactive/documents/render/15382.vtml).
IMPLICATIONS, OPPORTUNITIES, PROBLEMS AND PROSPECTS
Data broadcasting could reduce market share for on-line services like Yahoo! which do not own a broadcast feed. Increased use of digitized data transmission can create greater markets for storage technology. Easy access to specific information, reduced down load time, and freeing up phone lines have obvious advantages. Pricing, service, and how well technologies interact will determine consumer loyalty not just among institutions but also among individual users. What information they perceive as necessary or a luxury will define popularity and how closely information will exist with entertainment.
BellSouth News Release. Available: (http://www.bellsouthcorp.com/proactive/documents/render/15382.vtml)
Beniker, M. (1995) ‘Broadcasters offered second revenue stream: data’, Broadcasting & Cable, 28 August.
CBS MarketWatch (1998) ‘Economist & author Paul Erdman joins CBS MarketWatch.com as columnist’, 8 January. Online. Available: http://cbs.marketwatch.com (February 1998).
Data Broadcasting Corporation (1997) Annual Report.
Dempsey, K. (1996) ‘Getting hooked on TV,’ Marketing, 21 November.
Gurley, J.W. (1998) ‘Why data broadcast may take over the world,’ Fortune, 12 January.
Norpak online. Available: www.norpak.ca/ (February 1998).
Ringley, S. (1997) ‘Re: Marcus Cable Modems,’19 December. Online newsgroup. Available: comp.dcom.modems.cable (February 1998).
Telecommunications Industry Association online. Available: (http://www.tiaonline.org/pub/98-09.html) (31 March 1998).
WavePhore Corporation (1997) ‘WavePhore launches new European network’, PRNewswire, 14 November. Online news release. Available: http://www.wavo.com/europe.htm (16 February 1998).
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