October 3, 1996 -- Low-Cost Web-Access Devices

Transcript of the live chat session that took place Thursday, October 3, 1996.

These sessions are scheduled for noon-1 PM US Eastern Time (GMT -4) every Thursday.

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Since the chat itself happens at a rapid pace, it's often difficult to note interesting facts in particular URLs as they appear on-line. Here's a place to take a more leisurely look. I've rearranged some of the pieces to try to capture the various threads of discussion (which sometimes get lost in the rush of live chat).

Please send email with your follow-on questions and comments, and suggions for topics we should focus on in future sessions. So long as the volume of email responses is manageable, I'll post the most pertinent ones here for all to see.

For transcripts of other sessions, click here.

Threads (reconstructed after the fact):


Richard Seltzer ( - 12:02pm -- The scheduled chat is on Business on the WWW. If you are here for that discussion, please identify yourself.

We're here to share experiences about doing business on the Internet -- particularly the World Wide Web. What works? What doesn't work? Why? What are the trends that matter? How can you/should you adapt to the Internet culture and environment?

I work for the Internet Business Group at Digital Equipment in Littleton, MA. In that capacity, I end up talking to people from large companies about how they can use the Web for business.

I also have my own personal Web page -- which is content rich and no frills -- which I do for practically nothing and draws a fair amount of traffic and attention.

In a chat session like this things can get pretty frantic. It's sometimes difficult to follow the threads of conversation. And there's no time to write down interesting URLs and facts. So last week, I took a copy of the raw transcript and edited it to make the threads clearer and posted it at my own little Web site so anyone could take a look. You can see it at

I plan to do the same today. Barring technical difficulties, I hope to have a transcript up later today. I'll post it at the same site, naming this one /chat12.html

WEB TV etc.

Richard Seltzer ( - 12:06pm -- Today, while we'll (as usual) be open to questions of all kinds about business on the WWW, we would like to focus on the business implications of the new generation of low-cost Web devices (like WebTV) which are just now appearing in stores. Has anyone out there used one? Is anyone out there itching to buy one? If so, why?

Richard Seltzer -- DEFINING THE TERRITORY 1) WebTV = a commercial product from a company called WebTV Networks which is arriving in stores now (via Sony and Philips). Also the related online service. 2) Internet access by way of cable TV lines (that's what some folks mean when they say "I want my WebTV 3) Internet-enabled TV sets (I believe that's the route the Zenith, Hitachi, and Mitsubishi are taking). 4) A variety of diskless Web-access devices that may or may not involve TV connection Our discussion could head in any of these directions.

Long-range, such devices are likely to drastically change the demographics of the Internet -- adding the next 100 million users (people who do not now own PCs). Short-term they look much more chancy. What is your viewpoint?

Harold ( - 12:09pm -- Sorry Richard, I did not get a chance to read up on the references you suggested for today. Perhaps you could give a brief synopsis.

Richard Seltzer ( - 12:12pm -- Harold -- Brief synopsis. A company called WebTV Networks has a deal with Sony and Philips to provide Web surfing gadgets that connect to TVs. They have no hard drive. They use a remote control gadget. And you can get an infrared remote keyboard. They also will offer an online service (trying to provide a friendly advertiser packed onramp. There are lots of other gadgets coming soon too.

Bob Fleischer ( - 12:08pm -- I work for Digital's System Integration division, on a team concentrating on Internet and "intranets".

Richard Seltzer ( - 12:09pm -- Welcome Bob -- Long-range I can imagine low-cost diskless Web devices (that don't involve TV) playing a very important role inside corporations -- as the main way to access intranets. What's your view?

Bob Fleischer ( - 12:10pm -- I think that there's a chicken-and-egg problem here, the new devices (if they are successful) will be used by people for whom the current PC-Internet infrastructure was unattractive. This is a new paradigm -- and you need not just new devices attached to the current Web, but new services. What do people want?

Richard Seltzer ( - 12:14pm -- Bob -- I agree. They'll need new services. And it looks like their business model is to be the provider of those services (letting outfits like Sony and Philips sell the boxes). But Such diskless devices are aimed at a passive, consumer, TV-like audience, while the main attraction of the Internet today is interaction among people (along the lines of AoL's chat operations), and the ability to publish (AoL giving all 6 million of its users 10 Megs of free Web space, and other providers heading in the same direction).

Bob Fleischer ( - 12:12pm -- Is the French Minitel a model (obviously one which needs updating) for the WebTV? (By Minitel as a model, I mean the services behind it much more than the device in the home!)

Richard Seltzer ( - 12:16pm -- Bob -- Minitel... interesting idea. By that model the telephone rather than the TV is the most logical link. Let's face it -- this is a grafting operation. The question isn't whether there's a need for low-cost simple ways to connect to the Internet. The question is whether the gadget leads to a natural graft. I believe that the heart of the Internet is activity and interactivity, rather than passive consumption. Hence I don't believethat TV (other than as an alternative to a monitor) is a natural link.

Harold ( - 12:14pm -- Do you think they will offer interactive chat like we are presently using?

Richard Seltzer ( - 12:19pm -- Harold -- If they do offer interactive chat, they have a chance for success. But 1) imagine trying to do this kind of chat with a remote wireless keyboard (I remember the headaches of trying to play videogames with wireless controls) 2) take a look at their Web site. A Web site says a lot about a company. have no interactivity, and while they provide bios of managers, they give no email addresses. And there is another site run by a different company with the address Looks to me like they just don't get it.

Bob Fleischer ( - 12:18pm -- There are all kinds of information needs for which I might go to my TV today (weather, news headlines, sports results) for which a customized response could be delivered to a WebTV. In addition, theatre schedules, train timetables, telephone directories. The problem with the current TV model is that it is entirely passive (beyond the choice of channel!). The WebTV is interactive, but with a remote control rather than a keyboard and mouse, the kinds of interactions at which it's best will be very different.

Richard Seltzer ( - 12:21pm -- I have a number of reservations about this particular device. 1) infrared remote connection for keyboard (memories of wireless remote controls for video games) 2) 33 K doesn't sound much better than my 28.8, and that's slow 3) diskless -- like buying a car without a gas tank -- in the future, many applications may run on the net rather than on your desktop and storage may be remote as well, but such applications and storage services are not there now.

Bob Fleischer ( - 12:23pm -- I do think that making TV a little more interactive, rather than as a replacement for PCs on the Internet, makes sense. But I must remember that such ideas have made sense for a long time to many people who have tried in numerous earlier experiments with earlier technology to make TV more interactive -- and they have failed. Was it their technology that failed, or was the time just not right?

Richard Seltzer ( - 12:24pm -- Bob -- While the content on the Internet is likely, over time, to become more "entertainment" oriented, what's out there today is largely "information". It's hard for me to imagine what today's purchaser of such a device is likely to do with it. I suspect that the hype will bring a quick surge of sales, and that soon thereafter sales will come to a standstill. I can't imagine spending that much time checking the weather and the sports scores. These folks are going to want to be entertained, and I don't see anything today that's going to deliver that to them. Hence I expect there to be a huge brief surge in sales as people buy it not understanding it. Then sales will grind to a halt. And maybe a year from now specialized devices that are more on target will have an uphill battle to get over the backlash, but will probably turn out to be very successful.

Richard Seltzer ( - 12:27pm -- All -- Is there anyone connected now who is outside the US? I'd like to get the international perspective. WebTV and other such devices might prove far more important and successful in parts of the world where PCs are not so common.

Bob Fleischer ( - 12:41pm -- Has anybody tried using the WebTV system -- is it at all of value with present Web services (which are aimed at users of PC browsers)?

Richard Seltzer ( - 12:43pm -- Bob -- I've read that they will have a $19.95 per month price for their Internet access service -- and you'll need to go with them to be able to use the device that Sony and Philips is selling. Looks like they are hoping to get a lock on a set of customers, who wouldn't be able to switch, and who will be forced to go through their AoL-like entry point.

Warren Agin - Law Solutions ( - 12:44pm -- Doesn't sound like internet access to me.

Internet Access Speed

Bob Fleischer ( - 12:31pm -- Going (way) beyond modem speeds is essential to any vision of diskless PCs in the home.

Harold ( - 12:29pm -- It is my understanding that incoming is equivalent to a T1 line, and outgoing is approximately 1/3 of a T1. This might still be a valuable use of the "TV cable" for videoconferencing over the Internet.

Richard Seltzer ( - 12:34pm -- Harold -- Don't confuse the product and service called WebTV with cable access to the Internet. WebTV uses telephone lines and provides access at 33 K (which isn't much better than my 28.8, and which isn't good enough). Cable access is a separate, but very interesting alternative. There the receiving device could be a PC -- you just use the cable lines to bring the signals in fast.

Harold ( - 12:36pm -- Then I guess it does not really have much potential for business uses.

Richard Seltzer ( - 12:44pm -- Harold -- Remember the real business implications here are not with business use of the devices, but rather what the availability of these devices does to the Internet audience, the demographics, the numbers of people and kinds of people who will then be able to get to Web sites.

TVs with Internet Features as an Add-On

Bob Fleischer ( - 12:28pm -- I think that the cost to have a WebTV must be in line with other premium features on the TV set, so that people who are buying a set for the den or living room will consider it just an option to a television set -- certainly not a substitute for a PC! (There's another kind of device we might wish to talk about, a stripped-down, diskless PC -- the "network computer". I think that they are quite different from WebTV and probably an even harder sell.)

Richard Seltzer ( - 12:32pm -- Bob -- Yes, Zenith, Hitachi, Mitsubishi and others are going to be offering TV sets with Internet capabilities as an added feature (like buying a TV with a VCR built in). That makes good sense. I think that approach is far more like to work than WebTV today -- because the users' expectations are in the right ballpark. It's still a TV. It doesn't pretend to be a PC. And it does more than you expect of a TV.

Bob Fleischer ( - 12:35pm -- (yes, I'm probably abusing somebody's trademark to use "WebTV" generically, to mean a TV with network capabilities, my apologies.)

Internet Access over Cable TV Lines

Harold ( - 12:23pm -- Have any of you here now ever connected your computer to the cable TV connection that is being talked about? Do you simply have a switch to either connect to the TV or connect to yor computer and access the Internet?

Richard Seltzer ( - 12:26pm -- Harold -- No I haven't tried a cable connection for Internet access. It sounds interesting but I hear there are problems because cable systems are designed to deliver lots of bandwidth to the home, but normally don't take much information back the other way.

Content for WebTV?

barbara ( - 12:32pm -- What will be the benefits of WebTV - what will be on it?

Richard Seltzer ( - 12:37pm -- Barbara -- The WebTV folks seem to have visions of providing a wide range of programming. That's where they could make their bucks. For starters they would be a competitor with America Online -- part online info provider and part Internet access providers. Longer term they probably dream of being in control of the equivalent of thousands of TV stations. (With better bandwidth audio/video over the Internet has interesting potential.) The problem is a chicken and egg one -- They can sell the gadgets today, but they don't have the content. But without selling the gadgets they won't have the cash or the incentive to develop the content.

barbara ( - 12:39pm -- So this is really a new market with lots of possibilites if someone can think of them.

Richard Seltzer ( - 12:41pm -- Barbara -- Yes, you are Michaelangelo and somebody just gave you a lot of paint and brushes and a skyscraper to do what you want with.

barbara ( - 12:50pm -- Without a clearer goal, can WebTV survive? Gadgets are one thing, but don't you need content?

Richard Seltzer ( - 12:53pm -- Barbara -- I agree entirely. The key to success is content, plus providing opportunties for people to interact with one another (like this chat session) and to provide/publish their own content. WebTV -- the product and service -- to me, personally, looks like a loser. But lots of the other things in the works which can learn by their mistakes could prove very important in the long run.

Market for Specialized Web-Access Devices

Richard Seltzer ( - 12:30pm -- To a degree, I'm acting as devil's advocate here. I firmly believe that low-cost devices will bring the next 100 million users to the Internet -- transforming the demographics and opening enormous business opportunities for Internet entrepreneurs. But the question is -- when will this begin to take effect? Will it be a rapidly rising curve from the moment these things hit the stores? or -- as I'd guess -- will there be a spike, a fall, and then a steady rise when the second generation gadgets become available? It's important to know if you are depending on the Internet for profits over the next two years.

Todd Moyer ( - 12:36pm -- I agree with what richard is getting at in that I would expect to see more entertainment and more specialized devices. A "NetBoy" where people can find others to play multi-player games.

Richard Seltzer ( - 12:40pm -- Welcome, Todd -- yes, a NetBoy, like GameBoy. Specialized cheap gadgets to play specific games that happen to go over the Internet. Also cheap specialized information gadgets -- like a wireless palmtop that provides stock price and other selectable news feeds. I see business applications for those. I also see heavy intranet applications for diskless Web devices -- in corporate environments where data can safer and readily be stored remotely.

Warren Agin - Law Solutions ( - 12:42pm -- Richard, or even specialized gadgets for business use. Like stock updates, or tapping into the on-line telephone directories and map creation systems that are now sprouting on the net.

Richard Seltzer ( - 12:46pm -- Warren -- Yes, those are good examples,. I suspect that in five years we'll each have at least a dozen specialized gadgets that access info and entertainment from the Internet. I expect them to be enormous commercial successes. But the first generation, which is just hitting the stores right now, looks off the mark -- missing the power and potential of the Internet and trying to resurrect failed interactive TV models.

Bob Fleischer ( - 12:42pm -- "Happen to go over the Internet" -- is there any reason that such devices should use the internet as we know it today rather than another communications medium?

Todd Moyer ( - 12:45pm -- Bob F. - What alternative to the net can you think of?

Bob Fleischer ( - 12:48pm -- Todd -- I actually think that the internet (actually, the internet as it will evolve) can handle this, but connecting game players might seem to use none of the existing services built on the internet except for the raw transmission of bits.

Todd Moyer ( - 12:51pm -- Bob - I agree, but isn't that enough? Raw phone lines and cable connections aren't even good at that. Also, I see devices without keyboards as being significantly different from those that have them. For a lot of browsing, the only time I'd miss the keyboard is in entering search keywords.

Richard Seltzer ( - 12:51pm -- Bob -- There are already a number of videogames that are meant to be played over the Web. Some of these are old CDROM games like CivNet, that just add communication over the Internet for multiplayer remote games. Also, chess. Others are new games that you connect to a Web site and find the other players there and only need your browser. Others are like that only Java-based. But the handheld wireless gameplaying gadget that connects to the Internet is a natural eventually.

Warren Agin - Law Solutions ( - 12:51pm -- Perhaps the key is to make sure that the webtv device allows users to easily access and manipulate the content currently on the web, as opposed to just acting as an interactive television.

Warren Agin - Law Solutions ( - 12:52pm -- Todd, wouldn't you miss your keyboard right now?

Bob Fleischer ( - 12:54pm -- Until there's good voice recognition, it doesn't seem that a chat like this could take place without a keyboard (and with a typist like me, even that's a challenge!).

Todd Moyer ( - 12:56pm -- Warren - I would, but I'm a technoid, not one of the 100 million we're looking to join the web.

Richard Seltzer ( - 12:57pm -- Warren -- Remember WebTV does have a keyboard -- a remote one (which isn't likely to be of much use for fast typing like this), but also a port for a regular keyboard. But the whole model is built around the notion of "12 feet away instead of 12 inches". They are aiming it at passive couch potatoes. By the way, to me just as important as a keyboard is having the ability to save the content etc. that I see. I need a disk, or I need an inexpensive and reliable environment that lets me readily save whatever I want to save remotely (which seems far more likely inside a company than on the public Internet -- public facilities like that are not yet available, that I know of. Even when I have to use remote disk space for mail at my shell account on TIAC, I go crazy moving and erasing files, because my desire to save so far outstrips the meager space that is made available.

Warren Agin - Law Solutions ( - 12:58pm -- Todd, the point is that communications means written communications in many instances. You don't need to be a technoid to use a keyboard. I don't think the manufacturers of these devices should assume that people aren't willing to use a keypad.

StrongArm Processor

Todd Moyer ( - 12:43pm -- Richard - Has DEC announced any net devices taking advantage of the StrongARM processor? (That's a high speed CPU with very low power consumption.)

Richard Seltzer ( - 12:48pm -- Todd -- I saw the StrongArm announcement. It talked a lot about the potential of that chip for such things as 3D games and low-cost Web devices. It quoted someone from Oracle about Web devices but didn't specifically say that Oracle would be using that chip. But everyone knows that Oracle has such a device in the works. I'd be very interested in details -- the difference between a blockbuster and a total loser is in the details -- does it or doesn't it make it easier for people to do Internet things (e.g., interact with other people).

Wrap Up

Richard Seltzer ( - 12:58pm -- Time is running out fast. We seem to be just warming up. Is there interest in continuing this discussion next week? If so, I'll trying to get someone from WebTV Network and maybe from some of the other players to tune in. Please let me know.

Bob Fleischer ( - 12:58pm -- So when do we discuss the business opportunities of the diskless PC?

Richard Seltzer ( - 1:00pm -- Bob -- We could followup on diskless PCs next week along with continuing today's discussion, if that's what folks are interested in.

Todd Moyer ( - 12:59pm --I'd like to continue next week, especially if you can get some industry reps.

Richard Seltzer ( - 1:01pm -- Todd -- I'll do my best to round up industry reps. Please spread the word.

Richard Seltzer ( - 12:59pm -- Remember -- please send me email or with followup comments; and I'll add them to the transcript.

All, please, before signing off let us know your email addresses/URLs for further followup. That includes those who have been listening in the background. Send me email if you'd like to be sent reminders about these sessions and the topics scheduled.

And remember that I'll be posting an edited transcript of today's discussion at later today.

Thanks to all. Please join us again next week and spread the word. And send me email at or

Follow Up

From: Richard Seltzer Date: Oct. 4

It was a very lively discussion. People tend to be confused by the variety of ways terms like "WebTV" are used in the press.

1) the product and service of WebTV Networks (the box being sold by Sony >and Philips and the new online service being created by WebTV Networks)

2) Internet access by way of cable TV lines (a la Time-Warner)

3) Internet-enabled TV sets (Zenith, Hitachi, Mitsubishi, etc.)

4) diskless PCs and other Web-access devices that may or may not involve TV connection.

As usual, we really got rolling right when the hour was ending. So we're going to continue the topic next week (Oct. 10).

I'll try to get a representative from WebTV Networks and possibly folks from other players to tune in for that session.

This is an opportunity to sort out what's happening in a confusing but important area of development. The success or failure of these products and services could have an enormous short-term impact on the size and demographics of the Internet audience, which is very important to anyone interested in doing business on the Internet.

Please let me know if you have contacts at any related companies. Also please point me to any related articles on the Web, so I can compile a suggested reading list.

From: Bob Fleischer, (508)952-3978,, Sent: Friday, October 04, 1996 4:49:26 PM

I use the term "diskless PCs" to mean essentially what I think Oracle means by Network Computer -- Microsoft has also floated its notions of what a low-cost network access appliance would be. A participant from either would be ideal (probably a little hard to get, however!).

From: Ted Kochanski <> Date: Fri, 04 Oct 1996 18:00:06 -0300

I'm working with a company (OmniBox, Inc) that is developing Interactive Network technology. This system was originally focused on set-top-devices for TV with the programming delived via digital modulation on a cable. Subsequently, the programming can be delivered to a PC via the cable (or DBS or MMDS or even Telco -- ADSL). Its even possible for the programming to be delivered to a PC, TV etc via the Internet

The key element of the system that is constant (and protected by patent) is that:

1) The user's device receives incoming streaming information and stores it in memory.

2) The user interacts with the stored material and then when the process is complete, swipes a credit card through a reader built into the device or an accessory

3)The device contacts the credit card bank through either a POTS modem or some other channel

4)The bank completes the transaction and notifies the product vendor of the order for a product or service to be delivered

For instance, rather than waiting for more than hour for the latest version of Netscape to download (7 MBytes), OmniBox users could get the latest update in a minute or less

OmniBox is on the web at


ted kochanski

From: Richard Seltzer Date: Oct. 8, 1996

Several people asked for pointers to on-line articles so they could do some background reading.

I'd suggest

o the Web TV home page

o NewsPage search for "webtv"

o a RealAudio file of an interview with Perlman

From: Todd S. Moyer <> Date: Tue, 8 Oct 1996 09:46:47 -0400

Here are a few sites for the suggested reading list.

Sony WebTV device --

Windows CE --

Philips/Magnavox WebTV device --

From: Roger Horine, Marketing Communications Manager, New Media Solutions Sent: Monday, October 07, 1996 11:41 AM

I'll try to join the chat Thursday, but a fundamental question I have is how can anyone get a low-resolution device like a TV set to display text in any kind of readable way? Lots of times web-based text appears so tiny on my high-res PC monitor that I have to squint to read it. I can't imagine how that would work on my TV when I'm 10 feet away.

Keep up the good work!


From: Richard Seltzer <> Date: Mon, 7 Oct 1996 12:35:06 -0400

Roger, I agree entirely.

And today, the best stuff on the Web is text. Eventually, with much better bandwidth, reasonable quality full motion video will be delivered over the Internet and a whole range of entertainment (rather than information) sites will flourish. But it feels like these devices are arriving on the market before the content they were made to deliver is available. Hence, I expect a backlash and then the introduction of other devices better suited for delivering today's content.

Best wishes.


From: Nancy Enright <> Date: 9 Oct 96 14:24:07 EDT

Did you see the big article in this week's PC Week Magazine (10 /7/96) called "NC Trade-off"? It addresses your point 4 " A variety of diskless Web-access devices that may or may not involve TV connection". These do not involve a TV connection. You might want to add this article to your reading list. It begins on page 55. My company, IDEA, is mentioned twice in the article. We are working with Oracle. Actually I have not read the entire article myself yet. As soon as PC Week arrived, people tore out the original and I have only been able to track down all of it. I am not working on this project - I am working on " Internet Host Server" which will allow users to access mainframe (3270) and midrange (AS400) systems via the Internet and display the screens via a browser - so that the only software on the client is a browser. But I am checking to see if someone in NC marketing group here at IDEA can monitor the chat tomorrow.

Nancy Enright

PS (followup message) -- I found the PC Week articles on line. They are at

[Editor note -- These links appear to have expired as of 10/10/96.]

Here a quote from the last article which discusses Boston College testing Idea's NC:

"Low cost is another reason for interest in NCs. Boston College, in Newton, Mass., has placed PCs on the desks of approximately 2,000 employees, but another 500 full-time and 1,500 part-time workers cannot access the school's network. Paul Dupuis, the assistant director of information technology at the college, said the $3,000 cost of a PC has been the main obstacle preventing the university from providing these workers with network access.

NCs, however, cost between $500 and $750, a justifiable price range for the college to spend on those who do not yet have computers, Dupuis said. So the college has begun testing the $650 Internet Client Station--which is scheduled to ship this fall--from Idea Corp., a Bedford, Mass., supplier."

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