After
proving the global audience for quality programming, the
cable programming leader talks about the future of
television..
Discovery
Channel founder John S. Hendricks, Chairman and Chief
Executive Officer of Discovery Communications Inc. has
proven that quality sells. Ignoring the cynics after
years of rejection, he found money in 1982 to launch the
Discovery Channel in 1985, cable's first channel devoted
to documentaries and nature shows. Discovery soon grew
into a staple of basic cable programming, surpassing 60
million American households.
Hendricks defied the skeptics
again in 1991 when he acquired and rebuilt The Learning
Channel (TLC), dedicating to preschoolers a six-hour
commercial-free programing block every weekday. TLC went
on to win more than 30 million cable subscribers
worldwide.
In 1992, Hendricks stunned
critics once more by announcing Your Choice TV (YCTV),
the world's first commercial "video-on-demand" (VOD)
digital cable service. Imagine watching whatever you want
whenever you want it -- news, movies, documentaries, TV
series, cartoons, anything. Hendricks predicted Your
Choice TV would be in 20 million U.S. homes by the end of
1996. Backed by TCI and John Malone (now AT&T), Your
Choice TV and VOD was hailed as the "killer app" for
interactive TV.
Instead, by 1996 the bubble had
burst for interactive TV superhyped before enough digital
infrastructure was built to deliver on the original
promises. In 1998, with less than 100,000 subscribers,
Hendricks suspended business operations of Your Choice TV
as a near video-on-demand (N-VOD) service. Assorted
programs on multiple channels were starting so often that
it was nearly on-demand. The digital infrastructure was
not yet built out enough for true VOD, Hendricks said,
promising to try again when the market was more mature.
No relaunch of YCTV has been
announced, but with the rollout of retail digital cable
settops in year 2000, cable casters will be looking for
content. Hendricks is planning to meet the demand.
Preparing for broadband with a narrowband presence,
Discovery
Online keeps pushing the
boundaries of interactive multimedia. Whenever he's ready
to revive YCTV, Hendricks certainly has the resources to
back a relaunch.
According to The
Industry Standard,
Discovery Communications Inc. (DCI) earns about $1
billion annually in sales from all activities. Discovery
Channel alone reaches about 250 million homes in more
than 145 countries., supporting 3,000 employees
worldwide who tend to love the Discovery culture.
Spinning off new channels from its archives, Discovery
now offers to cable and satellite viewers such new
options as Discovery People, Animal Planet, The Travel
Channel, and Discovery Health. Building the Discovery
brand, DCI operates actual and virtual retail stores
(Nature Company, Discovery, Scientific Revolution)
selling videos, CDs & DVDs, software, and related
merchandise. Discovery's leading competitors include
National Geographic, Disney, Viacom, and Time-Warner.
Hendricks needed to sell stakes
in his venture to realize his vision. Discovery today is
owned by AT&T's Liberty Media Group (49%), Cox
Communications ( 24%), Advance Publications (24%), and
the remainder (about 3%) is retained by the founder.
Worth multiple millions on his own, he oversees an empire
that every year garners fresh awards for quality
programming, pushing the standards of the entire
industry. The cultural forces being influenced by
Hendricks ultimately touch lives all around the
planet.
Young John Hendricks entered the
television business after a successful career in
education as a consultant to more than 160 universities,
colleges and educational film distributors. He earlier
had directed corporate relations for the University of
Maryland, previously directing community and government
relations for the University of Alabama in Huntsville.
he'd earned a 1973 magna cum laude B.A. in History from
UA, which awarded an honorary doctorate in 1991. A
classic baby boomer growing up in Huntsville, he had a
boyhood fascination with the local aerospace industry.
This conversation with John
Hendricks was recorded by telephone in the summer of 1995
for my "Compelling Visions" article in
Convergence. The interactive TV hype bubble had
not yet burst, and the Internet was just starting to
emerge as an open public network. He spoke with me by
telephone from his office at Discovery Communications in
Bethesda, Maryland. His manner, as ever, was gracious and
engaged.
.
Freed: I'd like us to
focus on one basic question. What is your vision for the
future of interactive television in ten years? A simple
little question.
Hendricks: There you go.
Something we spend a lot of time thinking about.
Let's clarify what we mean by
"interactive TV." A lot of people think the TV is going
to merge with the PC, but I see these two staying
separate, with the TV, watched from about 12 feet away,
being for passive entertainment with interactive options.
Are people ready to use
remotes for more than channel surfing?
People have been fairly passive
with their TVs for five decades. Today, with channel
surfing, people have become a little more interactive,
and that been a big change. They're cruising the TV
channels, maybe watching several channels at once. But
this next wave of interactivity, brought about through
expanded digital capacity, is going to be even more
dramatic.
The first most people will see
of this interactivity might come in late 1995. And that
will be our video-on-demand service, but it's still not
going to be "500 channels" to start with. We're still
testing the appetite for these advanced services once
digital cable compression begins. Even so, we're pretty
confident Your Choice TV is going to be a winning
application that successfully competes for digital shelf
space.
.
Quality
Control
Of course, one can have all
the whiz-bang technology in the world, but if there isn't
quality programming...
And there isn't that quality
content yet. What we're seeing is that most people highly
value those things that are promoted, so those are the
most popular shows on TV. As consumers, our greatest
challenge is supporting the quality programs, not just
those promoted.
Guess we tend to forget that
ratings more than quality decide what's on the schedule.
I notice, by the way, that we've been talking here only
about programs where we sit back and watch. Do you ever
think we'll get to the point that detective mysteries
will be interactive, where we get to say "whodunit" and
change the story?
No -- and this is a personal
opinion -- I think the market for that will be limited.
People don't really want to do much work at
night.
You think TV viewers would
rather sit down and be entertained.
I think the first mass
application of this new media is people being able to sit
down and control their TV viewing. Right now we have to
meet these "appointments" with programs that network
programming executives set for us. Well, life gets in the
way of our TV watching.
So, we think the first
applications of the new media, and the first commercial
success, will be built on people going after quality
video products when they want them. Those will be the
movies we missed at the theater and the TV shows we
happened to miss at home.
.
Enhanced
Services
Apart from video-on demand,
what else do you foresee on digital TV?
A second application will be
special-interest subscription channels. For people
interested in aviation, for instance, Discovery can take
our aviation videos and create an aviation channel, since
we already own those videos. Such programs will be sold a
la carte to about the same number of people who subscribe
to magazines on those topics.
Now, we don't know which
specialty channels will succeed. There'll be a number of
new channels that we'll kind of throw against the wall to
see what sticks.
A third TV application will be
online services delivered quicker and with better video
and graphics than you're now able to get over your PC.
That'll be Internet access along with access to all the
commercial packagers of digital information like America
Online.
For online services, we sit
at a keyboard and work more intimately with our
screens.
That's right. And a big question
is whether data services will go to the TV or stay on the
PC. Right now, our thinking is that the cable or
telephone line will come into the home, and there'll be a
splitter with one line going to your TV and another line
going to your PC, where commercial online services like
Prodigy or America Online would go.
Of course, you also will get
more information on the TV than ever before, and you'll
certainly be reading menus on the screen.
Right. You'll turn on the TV
set, and a main menu will ask what you want to do. Do you
want to watch regular TV on the regular channels? Do you
want open Your Choice TV and maybe order a movie or a TV
show, or a Discovery documentary? It's like wandering
over to the bestsellers rack in the bookstore. Or maybe
you go to the video library. I know I'll order some of
the old Twilight Zone episodes as they're
digitized.
.
Killer
Games
So, that's four forms of
television so far, five if you count plain old
TV.
Yes, and there's a big sleeper
category. I shouldn't call it a sleeper, really. We just
don't know the dimensions yet, and that'll be games.
Interactive games can be
delivered by cable and downloaded to a TV very
economically. This is a threat to hardware manufacturers
like Nintendo, but games software people just have a new
platform.
I believe that's why Sega
created its own channel.
Exactly. They're getting
positioned for this new interactive media.
Now, we don't yet know what the
big "killer application" may be in the games territory.
There may be a game where students nationwide, even
worldwide, compete for scholarships. Or it may be a big
dating service. I don't know. It'll probably be something
we don't even think about.
.
Learning
Channels
And you've identified a
seventh kind of TV &emdash; education, or some call it,
"edutainment." Will TV ever fulfill its potential for
"distance learning?"
I'm looking across my desk right
now at a stack of CD-ROM discs we've already put out in
the "edutainment" field. And we have more titles in
development, all from programs we developed for the
channels but with video tailored [during
production] for the new media.
As the new networks are
installed into homes and classrooms, we plan to develop a
Discovery online service [for distance learning]
with products kept contemporary to the moment. One of the
failings of CD-ROM is that it's fixed in time, and we
hope to change that with our online service.
What about transaction
services like home shopping and banking, paying the TV
bill?
Absolutely.
That's eight. Anything
else?
Music, digital music, will be a
key feature in this advanced system. Hooked up for
stereo, your TV set will carry as many as 40 different
digital audio channels.
What about the telephone? Can
you imagine a movable window in the TV screen for a
viewphone call?
I think that's coming. The new
systems are being built two-way, and there'll be serious
competition between the cable operators and the phone
companies for telephone service. And phone companies,
likewise, are going to try to move in on the video
business of cable operators
.
What's
in the Box?
How might this effect the
television set itself? Do you imagine that media
"convergence" will ever produce just one TV "box" for
video, voice and data?
I think there'll be three
different versions of the box.
The "Level A" box will lets you
use the interactive video services, some online services,
and it certainly will let you play games. The "Level B"
box will attach to your PC, it will give you really
advanced multimedia interlinking services. And there may
be a "Level C" box that incorporates telephone service.
That third box would be the
"all-in-one" TV I've heard described.
Let's turn now to social
effects of the media. You said earlier that interactivity
on the new TV networks will be more "dramatic." How did
you mean?
I see people being able to get
more information in special-interest areas. One of my
special interests has been astronomy. It's been a
lifelong hobby. I was frustrated that I couldn't use my
TV to or get any live imagery from Hubble when the comet
fragments hit Jupiter. Well, if another comet crash
happens five years from now, we'll see it on a mass
basis.
.
Social
Effects
Do you think increased
interactivity will boost public understanding of social
and political affairs?
That depends on people's
inclinations. People can get well-informed by picking up
the New York Times or their daily newspaper and really
reading it, and reading the editorial sections. I don't
think interactive television, by itself, is going to
provide any more incentive. For those who are interested,
interactive TV offers another dimension, a way to get
information quicker and enriched with video imagery.
Studies have shown that if you
hear as well as see, as well as read, if you affect more
of the senses, people do learn more. Retention is better.
There is more understanding and recall on subjects
they've read about because they've also seen imagery
about it, and they've heard things. That's what the
multimedia platforms can do.
Some have said a
better-educated public could mean more people actively
participating in our democracy. Do you think that's
likely?
I think that's possible. I
think, too, that the greatest hope may be what we're
seeing in our tests. The younger portions of our
population are not intimidated by this technology.
They've grown up being more interactive with video games
and the computer.
How might this interactivity
effect them?
We've seen evidence in studies
that some people on the Internet find more feelings of
camaraderie among special interest groups than in their
own neighborhoods, where maybe there's no one around who
shares their interest in aviation or astronomy or
whatever. This new platform will be able to link up a lot
of people in a more mass sense.
Internet users often talk of
feeling a global sense of community from their
interactions. Is this the kind of linkage you
mean?
Internet does do that today, but
the Internet still is limited to people who are fairly
computer literate, who even have a way to get onto the
Internet. But advanced TV, because it will be deployed on
a mass level, will broaden our ability to link up and
share views.
Well, can you imagine
anything else about the future of
television?
No, that's about it. I think
we've covered it all.
.
