Future of e-Commere, online retail, video streaming, media services - what next? ARCHIVE - Accurate predictions made in 1997. Over 25 years of successful trends forecasting. Futurist Keynote Speaker

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Archive for interest: 1997. People often tell me that only computer nerds and "sad people" use the net. How wrong they are.

Almost four out of ten homes in the US already have a personal computer and one in three of these has a modem enabling the computer and telephone to be connected. By the year 2000 at least 20% of all US households are expected to be on-line. At present, the median age of users is 32 years, 64% have college degrees and 25% have an income larger than $80,000 so the image of the long haired student computer freak is quite wrong. Half of internet users have managerial or professional jobs and 31% are women. There are now (May 1996) more than a million web sites for them to visit.

They use it for e-mail, to receive up to date financial information, for writing reports, for research and also for entertainment during work breaks. The net has moved from being primarily a university tool to a major source of commercially valuable information. Some spend huge amounts of time connected. One survey of men in New York found that around one in five spent forty hours or more a week on the net, while 62% spent more than two hours a week on it. The average weekly use by men and women was 6.5 hours. Six out of ten said that they had cut down on television as a result, with some pundits predicting that internet use could exceed television audiences at Prime Time in some US cities.

Internet addiction is becoming a medically recognised problem with signs of irritability following withdrawal. Some people get a huge buzz out of zipping around the world via their computers.

Children at risk?

More than a million children are estimated to be net users, raising fears of exposure to all kinds of undesirable influences. The net is a composite of everything that is good and everything that is bad in publishing, radio and in television as well as the murkier side of the video industry. Anarchists, bomb-makers, drug dealers, paedophiles and sellers of obscene materials can all operate almost without fear of control in the cyber-world.

Since the net is becoming so secure it is hardly surprising that it has acted as a magnet for people who have something to hide. And since the internet search engines are so powerful, it is a matter of a few seconds to locate the one person in a million with a particular rare (and possibly dangerous) obsession or interest. For example, there is a fairly continuous stream of information on bomb-making which is easy to access - just type "bomb-making". A few months ago I was surprised to find detailed instructions on making a home-made grenade.

The unabomber attack in Oklahoma was said to have been aided possibly by bomb-making information on the net. A couple of weeks after the bombing, two teenagers in New York were injured making a pipe bomb. The internet listing for pipe bomb instructions was still visible as late as September 1996, although the web site link had been disabled. Human beings have never had so much power to link so rapidly with others of like mind. In ancient societies one's social circle was limited to a village, town or tribe. Even expressing an eccentric wish or deviant thought would have been to risk ostracising or worse. Today, the darkest of dark thoughts can be revealed anonymously in cyberspace with pointers for people of like mind to get in touch via e-mail. However, such people are taking risks that others drawn to their e-mail boxes may be looking to gain evidence leading to a prosecution.

Buying and Selling on the Net

The internet is used widely to trade and persuade. More than two and a half million people have already bought goods and services using their computers. The value of the trade in 1996 was around $1 billion, with growth expected to reach anywhere between $7 billion and $170 billion a year by early in the next century. Music sales are popular. One site sells 25,000 CDs every day, allowing people to hear samples before they order. The world's busiest site is a CD site, able to send out a staggering 100 megabits every second - that is the equivalent of 6,000 volumes of Encyclopaedia Britannica every minute.

Magazines are also picking up large readerships. Just a few months after launch, the electronic EMAP magazine collection was receiving 350,000 "hits" or different access requests every week.

Every big company you could think of is clambering on the internet band-wagon - or thinking of doing so. No less than 82% of corporate users aim to have their own server computers by the end of 1997, and people selling server facilities are expecting to earn at least $3 billion a year. Most of these new web-sites will provide far more than just an advertisement for their owners. In addition, many companies which already have web-sites of their own are planning to expand them. This means yet more free gimmicks and useful ideas to draw us to their sites. In the first four months of 1996 alone the number of major sites (domains) on the web rose from 170,000 to 300,000. This is a vast investment, with each site costing up to $1 million.

Every site is now competing with the rest for attention and the pressure is on to develop ever more interesting, entertaining and exotic features. This should hardly surprise us.

Entertainment stations on internet

Commercial terrestrial television is entirely financed by brief adverts which fund long periods of high quality television. Television companies are independent of any advertiser, and sell space into programs they have already commissioned (with rare exceptions). However, on the internet the operation is becoming reversed, with major companies setting up their own entertainment stations, looking to tempt internet surfers into their area, and hold them there long enough to keep hitting them with adverts for their products. This is an all out war against other internet users and against conventional television.

The success of a campaign in future will be measured not just by television ratings but also by millions of mouse clicks. So long as a company can be sure of attracting a big enough number of participants (because internet audiences like to be very interactive), then they might be willing in time to cut television advertising budget and shift it into net entertainment. Internet users are a prime target audience because of their relatively high incomes, and because as we have seen, they are cutting down on television.

Success breeds success, and the more millions of dollars there are poured into free net entertainment and information services, the more people will use the service and the more people will make purchasing decisions while there. At the same time, television companies are struggling to make their own technology interactive. If they can do so, they will be onto a winner because the quality of interactive television is far better than anything that computers can cope with at present. In five to ten years it may be very difficult to know if you are enjoying interactive entertainment on a TV-quality computer system, or interactive entertainment on computer-powered television. In the middle of all this confusion will arrive large flat screens mounted across walls in rooms, providing high resolution, wide screen images and perhaps new three dimensional projections.

Television companies threatened by the future

All this will create a very exciting future, if you enjoy new technology, but a very nerve-wracking one if you are a television company. I was talking to a friend the other day who is a regular television presenter for several programmes. He tells me that senior executives are now uncertain what television will even look like beyond 2000, let alone what sort or programmes people will want to watch once they have 500 or more channels to chose from - not including a billion internet pages and tens of thousands of internet videos to connect to. Video-rental shops on street corners are likely to take a real hammering and many will go out of business unless they find a new product by 1999. It may turn out to be something like ultra-high resolution interactive CDs, containing such vast amounts of interactive television and animations that even a cable system cannot compete. I doubt it somehow.

Cable has huge untapped capacity, even without new systems to compress television transmission. However there will probably always be a market for hiring bits and pieces that are too expensive for people to buy. An example might be virtual reality headsets and gloves, allowing the user to see and feel a virtual world. A shop might hire out a set of four so that a whole family could go into a virtual world together, seeing each other and interacting not only with the others there but also with users in other cities or nations.

Internet advertising

While many internet sites at the moment are run by companies looking to sell their own products (banks are a good example), others have been set up to sell advertising space just like any other media company.

An example might be a virtual reality area which is free to join but which contains high profile adverts for a number of different products and services. IBM and Microsoft spent around $800,000 million on net advertising in 1996. Spending on internet ads rose by 83% in the first six months of 1996 to $71.1 million. Advertising works on the knowledge that the average net user looks at two hundred pages a month, and many of them are in upper income groups. Internet advertisers can be invoiced on the number of times a user selects their product pages. Each cluster of ten or a hundred visits then triggers another tiny amount onto the advertiser's bill. In this way advertisers know exactly what they are getting for their money.

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