This may be the year that the hype about videotex ends and the business of delivering electronic information to the home begins in earnest.
At least that's what a growing number of experts are saying about a largely inbred, virtually inactive business. "I think this is the year that it becomes a serious business rather than just the dreams of a bunch of engineers," said Richard Neustadt, a Washington attorney who has written extensively on home information.
In recent years, a host of communications industry concerns have been making exaggerated claims about videotex, systems for transmitting data on a two-way basis over phone or cable lines, and teletext, a similar one-way service sent on a broadcast signal or one-way cable. "A lot of people have oversold videotex," said David Simons, president of a consulting firm, Digital Video Corp.
But a series of important developments are transforming the business--which Booz Allen & Hamilton Inc. recently estimated would become a $32 billion field by the middle of the next decade--from the hoopla of conference planners and publicists to something resembling reality.
First of all, the emergence of the personal computer as a vehicle for receiving data has transformed the thinking of electronic publishers and others who had thought that they were likely to be the principal source for the computer terminals needed to receive videotex. Despite the competitive shakeout in personal computers, annual sales, compared with 1982, are still expected to double to $5 million. The total home terminal count is expected to rise from about 1.5 million at the end of 1983 to 10 million by 1985.
Largely as a result of that growth, subscriptions to various database services, such as those run by The Source, Dow Jones, and Compuserve, are growing by as much as 10,000 a month, according to industry estimates. By the end of the year, these services are likely to have as many as a quarter of a million subscribers, up from about 100,000 at the beginning of the year.
One of the biggest problems personal computer owners faced in gaining access to these database systems had been the cost of modems, which link computers to telephones and therefore to databases. According to Simons, that problem also is fading. Another consultant, CSP International, estimates that by mid-decade, 2.5 million to 3 million of 7 million home computers will be equipped with modems, thanks to the falling cost of the modem's computer chip.
In addition to the personal computer boom, the industry's prospects seem to be getting brighter because of the mounting interest being displayed by financial institutions.
The incentive to reduce paper processing costs has led major banks like Citibank and Chemical Bank to home technology and has convinced some that as personal computer prices fall, banks might even be willing to give away terminals capable of both banking and connecting with various data systems. Chemical bank's senior vice president, John Farnsworth, says banks, rather than information providers, will drive the home information business.
E. F. Hutton & Co. recently became the first in the securities business to get into the act and is introducting "Huttonline," a service that will allow customers to use computers to track their investments.
Perhaps the year's most important event in videotex is set for this fall, when Knight-Ridder Newspapers' Viewdata Corp. of America launches the first commercially available videotex system, Viewtron, in South Florida. It will feature news, information, home shopping and financial services through a network of banks and will be supported, in part, by ad sales.
CBS, which has conducted a series of videotex experiments with AT&T, and NBC also are pushing teletext hard in a handful of markets. Teletext advocates like to note that a million British households are now using a system there about three hours a week.
Yet on the eve of the industry's annual confab, Videotex '83, which begins Monday, industry observers say the business remains beset by uncertainty and self-doubt. Some newspaper publishers seem to be tiring of the business, particularly after their battle to keep Bell phone companies out of electronic publishing was largely won.
Moreover, no one program or test seems to have combined successfully the information, personal and financial services needed to put together a complete videotex or teletext package. Even backers of the most ambitious projects realize they have not solved the problems of the high cost of these systems. The Viewdata South Florida project, for example, will rely primarily on the sale of hardware costing about $600.
Increasingly, however, experts think that information and financial service providers will join to take advantage of an existing base of home computers, from which the public will expect more and more.
"The public will start to get bored and tired of home computers," said Norman Morrison, Viewdata's executive vice president. "It's like the genie coming out of the bottle. You won't be able to stop it from happening."