At last, something truly interesting on the home computer front. Commodore International Ltd. -- manufacturer of the VIC 20, the 64, the 128 and the soon-to-be announced Amiga -- is going into the home computer networking biz.
Sometime by fall, Commodore should be bundling in floppy discs with its $39.95 modem that will enable its computer owners to sign on to a Commodore software and information network. You'll be able to tap in your access code and then retrieve the latest software games, programs and databanks -- for a $10 or $12 monthly fee. It may even offer electronic mail.
Does this sound suspiciously like The Source or Compuserve or Dow Jones? You betcha! But there's an unsubtle difference between the proposed Commodore service and the others. Commodore is a hardware computer. The company made its fame and fortune by "moving iron." It has a huge installed base. Consequently, it's in a superb position to leverage that base into the networking and service market.
Commodore isn't going at it alone. The company has formed an alliance with a spinoff of Control Video Corp. Remember Control Video? Founded by Bill von Meister (also a founder of The Source), Control Video originally was going to be used by Atari VCS owners and, via the phone lines, become "the MTV of video games." Of course, the video-games market went the way of the Great Auk, and Control Video was left dangling on the precipice of bankruptcy. Backed by some of the top venture capitalists in the business, Control Video burned up close to $20 million in financing and scarcely ended up with a few thousand subscribers.
But, like a New York cockroach, Control Video simply couldn't be killed off. Fate and cruddy market conditions crushed CVC to within pennies of its financial life but it still managed to survive. A new president installed by the venture capitalists recently completed a new round of financing to create Quantum Computer Services -- a CVC spinoff that will do the network with Commodore. Von Meister reportedly will not be a part of the new venture -- although it will rely on many of his ideas.
Bluntly, telecommunications may offer Commodore real growth potential. Indeed, it may be the home computer industry's best hope. The idea of turning the home computer into something resembling a phone -- but a phone that transmits text and graphics and software, not just a voice -- may be just the thing that rekindles consumer interest in home computers.
And there's all the home banking, electronic newspaper, biorhythms, electronic mail, computer teleconferencing, and community video games stuff that people have been talking about for years.
People fundamentally like to communicate, and networks are one way people do that.
Now look at Commodore's situation. It's been sinking fast. It ain't moving iron. Commodore's previously successful strategy of selling low-cost machines in high volume doesn't work in this market. The company's revenue and margins have collapsed along with the general slump in the home computer marketplace. Commodore's software sales are likewise going nowhere. Its new Amiga machine -- similar to the Macintosh -- may not sell in the quantities that Commodore needs for substantive growth.
So the hardcore business and financial reasons for exploring the potential of telecommunications clearly are there. Indeed, as a hardware company, Commodore can use the potential benefits of a service to spur its hardware sales. But figure that Commodore can scrape up 100,000 subscribers. At $10 a month per subscriber, Commodore pulls in $1 million a month. That's not small change, especially if Commodore can persuade a significant portion of its existing user base to sign on.
Why aren't Apple or IBM or even AT&T trying this? Heck if I know. Somebody has to bite the bullet and see if home computer networking can be exploded into a mass communications market. Comuserve, The Source and Dow Jones all are making money now. Maybe Commodore, with its low-cost philosophy, can become the low-cost network -- just as AT&T was before it was broken up. That's a pretty grandiose notion but, at this point, Commodore needs whatever hopes it can get.