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HolidayBuyer's Guide
Tech Industry

Net TVs nowhere near critical mass

As vendors hawk their wares at the Jupiter Online Services conference, one thing becomes clear: It will take a while for Net TVs to make a dent in PC sales.

NEW YORK--Maybe Gail Whitcomb, the spokeswoman for CompuServe (CSRV), said it best: "We don't really care how people get it. We just want them to get it." It, of course, is access to the Internet.

Whitcomb spoke for a lot of content providers here on the opening of the three-day Jupiter Communications Consumer Online Services conference, which focused on the emerging market of non-PC devices for getting on the Net. The bottom line: It will take a while for this market to make any dent in PC sales.

Jupiter released a report today predicting that as U.S. households continue to get wired, these "non-PC devices"--especially those that allow people to view the Web through their television sets--will become increasingly popular. But they won't storm the market overnight.

In fact, it will take several years for Web-based TVs to become popular. That somewhat pessimistic finding, if true, comes as a harsh bit of data in an industry that measures itself in hours and days rather than months and years.

The report predicts that it will take until the year 2002 for TV-based access devices to have real market share--that is, 12.7 million households, or 22 percent of the consumer online market, using Net TVs.

The report also throws cold water on the idea that these appliances will replace PCs for Net access. According to Jupiter's research, the market for Net TVs will grow slowly because many people will keep their PCs for email and Web browsing.

That sobering news runs contrary to what Steve Perlman, president and chief executive of industry pioneer WebTV, reported during his keynote address.

According to statistics collected by his company, which has only been selling WebTVs for five months (over 25,000 units were sold in the first two months and more than 50,000 are in circulation now), the markets for PC and Web TV users hardly overlap. In fact, he stressed, people who surf the Web using a TV want decidedly different things than those who surf the Web from their desktops using a PC.

"People do different things in the living room in front of a TV than they do in front of a computer," he said. WebTV owners tend to surf in groups and tend to be looking for entertainment on the Net. In fact, Perlman said he was surprised to hear from sites such as E! Online and Mattel's Barbie, saying WebTV was showing up as one of their top domain names.

PC owners, on the other hand, tend to surf alone and seek information. They also tend to be more patient about getting their information. Those using TVs to get to the Web expect the Web to be delivered as quickly as a TV show.

But while Perlman and Jupiter disagree on the WebTV audience, they do agree on another of the Jupiter study's conclusion: Web televisions will take a while to catch on.

This may be true for many new consumer products as well. Kamran Elahian, CEO of PlanetWeb, a Silicon Valley start-up that develops software for Web devices, says that he started four companies, three of which were quite successful. The fourth, a pen-based business, was a $40 million mistake. "What I learned from that was to create a new consumer category of any type, it takes a long time for that to happen," he said.

If anyone's rooting for the new devices to make it, it's content providers for whom the bottom line couldn't be clearer. As Whitcomb and a host of others reiterate, the most important thing is that people somehow get on the Net and to Web sites.

Companies like Visionary Media, which today introduced a superhero Web site, WhirlGirl, are counting on it.

"I think we're all trying to do the same thing," said David Williams, president of Visionary. "We're trying to find a new way into people's living rooms."