Our old friend, Conventional Wisdom,
has been telling us for some time that electronic publishing
is the wave of the future. It's multimedia books and magazines
on CD-ROMS, leading to full-blown on-line information systems
in all colors and flavors as the industry matures. Right?
So how do you get a piece of the action?
And where is the action anyway? Stay tuned.
According to speakers at last month's
Multimedia Expo, CD-publishing is about to take a giant
step forward, that is , if it doesn't fall on it's face.
"The market for CD-ROMs is going to
be huge and diverse," says evangelist Scott Mize, an executive
at Zelos Ventures, which is putting together financing
for titles.
"The most aggressive estimates for
the total titles marketplace are $5 billion by 1995. By
comparison, the music business is currently $6 billion,
and film a little over $4 billion."
Drive makers and "all the major publishers"
are targeting this holiday season for product launches,
according to marketing consultant Joanna Tamer, and you'll
see a major push of CD-ROM drives and disks in retail
stores like Macys, Sears, and Target. The New York times
predicts 2.3 million drives will be sold this year, upping
the total number of drives out there to 5 million.
But before you run to your trusty
computer and start putting together that interactive rock
n' roll cookbook there are a few things to consider.
Tamer worries that the Christmas rollout
may backfire because the industry is attempting to bypass
the normal market cycle for new technology.
In a normal cycle, says Tamer, "Early
adapters" who know what they are looking for are followed
by knowledgeable corporate buyers, a wider business audience,
and schools and educational buyers.
With acceptance of a new technology,
prices come down and a mass market finally develops. Such
a consumer market calls for drives that are priced under
$200, and "titles" priced at an impulse level: from $19.95
- $39.95.
This time the manufacturers and publishers
are attempting to jump from the early adapters straight
into the retail mass market on all levels, "before the
drives are fully adopted and before the world knows why
it would want such a drive." And they're doing it at Christmas
during a recession, she adds, noting that they could be
stuck with unsold inventories returned by retailers.
ETAK's John Delassandro points out
that those 5 million drives will include 20 different,
incompatible formats.
This confuses consumers, he points
out, and makes it difficult for developers.
"There are several TV platform systems
now, and a number of hand-held products. These things
need to become compatible."
"People want mobility", he adds, "they
want hand-held. They want to interface with televisions
and phones. But they want that disk they put in the phone
computer to also work in the TV computer, and in their
hand-held and their desktop.
"It's not happening today, and it's
making all our lives difficult."
Mize is less concerned about the multiple
platorm problem, because his company's products are designed
for the desktop.
If you are doing a full intereactive
media project, he says, and you what to keep things like
video and graphics easy, MPC and Mac are all you have
to think about.
But it will get more confusing in
the living room, he admits, where it "could turn into
a bloody battle."
It's true that the technology is still
evolving, Mize adds, but there's no reason to wait. You
don't have to wait for a better video standard, more memory,
or a faster drive. The technology is good enough. It's
at a state that's very useful right now.
"I think that where you're going to
see the "big wins" soon is where you're trying to communicate
some useful information, and where video that's not the
best and not the largest screen is just good enough along
with with sound of that same basic quality."
The Zelos strategy, according to Mize,
is to "develop empowerment products for knowledge workers"
in both the home and work environments; products that
deliver something that cannot be obtained in any other
media,
"We identify a goal or desire that
people have to accomplish or learn something, and provide
a resource that facilitates their attaining that goal
or learning that particular skill.
Mize doesn't think this consumer leap
is going to happen very quickly.
"CD-I and CD-TV sales suggest that
it's going to be a very gradual selling process, so our
strategy is to focus on products that have a little bit
higher price point, so there is a higher margin early
on -- with content and features of a value level where
we can charge somewhere between $50 and $200.
"People are not going to pay $120
for consumer titles, but we think knowledge workers will
pay for empowerment products. These people have an identified
thing that they want to accomplish by using this product.
It's going to help them in their work, their personal
interests, or their business."
"Computer marketing and distribution
experience will not translate well into CD-ROM sales,
he adds. "This area is driven by the content. The models
to look at that are the book business, and the record
business.
In marketing a product, both Mize
and Tamer emphasize that you need someone who is willing
to put time into figuring who are the right guys to give
the product to, and not just shotgun it out.
"We think it's important to identify
groups, associations, different collections of customers
that you can get to very efficiently," says Mize. "The
hit ratio of the people you spend time marketing to is
much higher. We also think that direct marketing is going
to be very important.
"I also think you're going to find
that advertising is going to find it's way into the new
media very quickly, and in fact that's the most effective
way to sell the final product.
"A successful beginning strategy may
be to create "lite" versions of the product on floppy,
some of which will end up being demos, and some of which
are entrees into what can be done with a larger product.
I can see a product line where maybe the floppy disk would
go for $19.99, and the CD for $89, something like that."
Zelos is a partnership between Mize
and Geoffrey Workman, a successful publisher of New Age
Music CDs. The company is actively looking for new projects.
" We go further than many publishers
might, says Mize. "We don't just say bring us a product
when it's done then we'll talk to you. We'll step in there,
roll up our sleeves, and help to get it done.
Among the other companies looking
for titles on CD-ROM, MPC, DOS, and Mac are the affiliated
label programs like Sony electronic publishing, Compton's
new Media, Broderbund, and Electronic Arts.
______________________