Videotex: Return engagement: Undaunted by unsuccessful ventures, U.S. corporate giants are planning new investments to give the technology a second chance

Abstract

Undaunted by unsuccessful ventures, U.S. corporate giants are planning new investments to give the technology a second chanceIt al! seemed so promising a decade ago. The Age of Information had arrived, and a new technologyvideotex-would bring the power of remote com puters into the living rooms of millions. Using cheap terminals and local phone lines, videotex cus tomers could call up thousands of pages of news, sports, travel schedules, and other colorfully illus trated information, as well as on-line shopping and home banking. There was, however, a slight pitfall in all these grand plans. In the late 1970s, dozens of companies rushed to design videotex systems and vied for a place in bringing the easyto-use, menu-driven technology into U.S. homes. But consum ers, it seemed, were not particularly interested in buying these videotex offerings. Some ventures failed.Is videotex dead? Far from it. New ventures are rising, includ ing consortia of top-drawer corporations in the United States. These ventures are building on the mistakes of earlier videotex providers, capitalizing on the potential of the personal computer, and, in some instances, narrowing the uses of videotex. Videotex today appears poised for a comeback.This turnabout is a far cry from the situation that videotex pio neers faced just a couple of years ago. Consider the experience of Keycom Electronic Publishing Co. in Schaumburg, III., initially a joint venture of Centel Corp., Hone>'well Inc., and Field Enter prises C o φ . , which planned to offer a videotex service to 700 000 residents in the Chicago area starting in 1983. By the time Keycorn's service got off the ground in late 1984, problems had already surfaced. Hampered by slow graphicsThe system's high-resolution graphics were painstakingly slow to appear on the screen, and the videotex terminal-a decoder to be linked with the user's television set--cost S350. Wliy pay that, plus $9 a month or more, to receive news, weather, and olher in formation available virtually free of charge over r.>dio and TV? Not enough consumers were willing.Keycom then launched a seven-figure advertising campaign to point out the capabilities of videotex, but sales still lagged. When Rupert Murdoch purchased the Chicago Sun-Times from Field E^iteφris^ in 1984. he also bought Field's 16-percent interest in Keycom; when he could not get controlling interest in the com pany, however, he sold his shares. Hone>'well, too, sold out of the venture in April 1985. Its judgment, it seems, was sound. By June 1985. after investing millions of dollars in home videotex and at tracting, by the estimate of one industry observer, only a few hundred customers, Keycom announced that it was backing out of the residential videotex business. James Dolan, the company's executive vice president, said, **We couldn't find a way to make money in consumer videotex, at least not yet."Other early vid^tex ventures have been plagued by similar