Sneak Previews Of Interactive Tv

Interactive television, at long last, is here. Sort of. Well, at least part of it.

On Dec. 14, the most ambitious interactive-tv trial yet will get its first public airing when Time Warner Cable Group unveils its whizzy new Full Service Network in Orlando. By the end of the month, its partner,

U S West Inc., will try out new interactive-tv technology in Omaha.

STOP AND SKIP. How whizzy? Imagine having hundreds of movies at your fingertips without leaving home--just a flip of the remote control and you can stop, reverse, or skip forward. Consider perusing an electronic mall or examining groceries in a tv supermarket. And news shows? You could tailor those to get video feeds on just the subjects you care about.

There's just one snag: It will be months before many of these goodies are available. Both systems are deploying limited services while they work out the kinks of an incredibly complex technology.

In Orlando, the trial, eight months behind schedule, will begin with six or so Time Warner employees. Plans call for 4,000 test homes by the end of 1995. In Omaha, U S West, which had originally scheduled its launch for last summer, will start with just two employees' homes. It hopes to reach 100 in early 1995 and 50,000 by midyear.

It turns out that delivering interactive tv is, well, a lot like rocket science. Sophisticated digital switches, computers for storing vast libraries of movies and data, and the software to navigate it all must be engineered to work together. Then there's a whole new class of tv set-top boxes from Scientific-Atlanta Inc., built around an advanced chip used in powerful workstations. "It took an incredible amount of hard work that produced a number of miracles to get the software working," says Thomas C. Feige, president of Full Service Network.

The cost? Analysts peg it at around $4,000 per home--making it the Cadillac of interactive trials. Omaha's system, on the other hand, is the solid family sedan. There, U S West is putting together a network costing no more than $1,000 per home. The difference is that U S West wants an affordable system that can go commercial by 1996. Time Warner is testing the full spectrum of possible services in the belief that by the time it's ready to hit the market, costs will come down.

The nub is, what will people pay for? No one knows for sure. Time Warner points to its "very successful" test in Queens, N.Y., where customers can surf 150 channels, 57 of which are dedicated to pay-per-view. U S West cites its two-year-old market test in Denver, in which customers ordered movies at 12 times the national pay-per-view rate.

Analyst Martyn Roetter of market researcher Decision Resources estimates that interactive tv could be a $300 billion business--at some point. But, he says, less than 10% of that business will materialize in the next five to seven years. All the more reason to get the tests up and running. Says Larry Levine, U S West vice-president for broadband and multimedia services: "A lot of people come from Missouri and say, `Show me."'

So show us.