Set-top boxes [will] sell for less than $500 in two years. [The] business model relies heavily on interactive advertising … People will want to interact with ads for information-intensive products like cars and pharmaceuticals. But at this point there’s no solid evidence that large numbers of people want to interact with TV ads or shop this way. The $4 billion video-shopping and infomercial industry has been successful because tantalizing videos of beautiful models create demand. Some people think QVC is entertaining.
Predictor: Feige, Tom
Prediction, in context:For a 1995 article for Wired magazine, reporter Evan Schwartz traveled across the U.S., checking out the interactive television consumer testing being conducted by entertainment/technology corporations. In the process, he interviewed Tom Feige, president of the Full Service Network. Schwartz writes:”Tom Feige, the president of the Full Service Network, says, ‘There has to be more revenue … ‘ Feige began his career selling cable subscriptions door-to-door in 1978. He’s the man with a plan to supply 85 percent of Time Warner’s 9 million subscribers with the network by 1998 and the one who must figure out how this system will eventually make money for the company. He won’t comment on reports of how much all this is costing Time Warner. But he says: ‘We think the expense is worthwhile because it lets us climb a steep learning curve. We’ll be finding out what people like and why. We’ve run lots of numbers, and we’re very comfortable that we’ll be making a good return.’ Besides, he says, the costs will eventually come down. He expects the set-top boxes to sell for less than $500 in two years. His business model relies heavily on interactive advertising. He predicts that people will want to interact with ads for information-intensive products like cars and pharmaceuticals. But at this point there’s no solid evidence that large numbers of people want to interact with TV ads or shop this way. The $4 billion video-shopping and infomercial industry has been successful because tantalizing videos of beautiful models create demand. Some people think QVC is entertaining. Besides, the cable industry has never been very successful in attracting regular ads. Less than 20 percent of its revenue comes from advertisements, whereas the broadcast industry gets nearly 100 percent of its revenue this way. Feige acknowledges this and admits that no one knows for sure whether these ad concepts will work. He says simply that he’s now in the phase of ‘understanding the market research.'”
Date of prediction: January 1, 1995
Topic of prediction: Getting, Sharing Information
Subtopic: Advertising/PR
Name of publication: Wired
Title, headline, chapter name: People Are Supposed to Pay for This Stuff? Crisscrossing the Country, Our Intrepid Correspondent Visits Corporate Labs, Model Living Rooms, and Actual Sofas, to Check Out the Megahyped Interactive Television Prototypes and See Just How Real the 500-Channel, All-Digital, High-Fiber Future Really Is
Quote Type: Paraphrase
Page number or URL of document at time of study:
http://www.wired.com/wired/archive/3.07/cable_pr.html
This data was logged into the Elon/Pew Predictions Database by: Anderson, Janna Quitney