Area’s Cable-Delivered Computer Service Failing to Get Its Message Out : Information: In the Antelope Valley, only nine out of 63,000 cable households subscribe to Ingenius, which charges only a start-up fee. Lax marketing and technical shortcomings are blamed.
When Antelope Valley residents received a flyer in the mail recently for a national service that sends up-to-the-minute news, financial and sports data direct to their home or office computers via cable TV lines, two conclusions would have been natural.
First, that the service, known as Ingenius, must be the latest breakthrough on the information superhighway, as the cable industry tries to move beyond carrying just pictures. And second, that it probably is costly to use like some other on-line computer information providers.
But they’d have been wrong on both counts.
Ingenius is not new. It has been carried nationally since 1986 and locally on Jones Intercable systems in the Antelope Valley and Oxnard-Port Hueneme areas since 1989, although it remains virtually unknown and unused by consumers. As for cost, the service is actually free on most cable systems that carry it, including Jones, after subscribers pay a $150 one-time equipment fee.
“It’s an incredibly rich thing. I use it every day and have for almost 10 years. As far as I’m concerned, it’s probably the biggest bargain in the on-line business,” marveled analyst Larry Gerbrandt of the media research firm Paul Kagan Associates Inc. in Carmel.
Ingenius, which functions as a personalized news service, offers continuous dispatches on national and international news from Associated Press, translated stories from six foreign news services, financial news and stock quotes, sports, entertainment and even state-by-state weather reports.
Yet Gerbrandt is the exception.
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In the Antelope Valley, only nine people out of 63,000 cable households subscribe to Ingenius. The number is similarly small in Oxnard and Port Hueneme. Nationally, the service--founded by TeleCommunications Inc., the nation’s largest cable operator--has fewer than 100,000 adult users despite being available to nearly 30 million households.
“The primary use at home is by news junkies. God, they love us. But there aren’t enough of those guys,” said Jerry Bennington, chief executive officer of the Denver-based Ingenius service. He said the company plans to continue the service but will focus more on schools, where it is claimed to be in use already at 18,000 of nearly 110,000 sites in the U.S.
Although there are similar services, Bennington said Ingenius is the only national and cable-delivered general consumer service for computers. It offers a glimpse of the expanded information services possible in the home market, where the cable and telephone industries are battling to dominate.
Analyst Gerbrandt said Ingenius’ tiny customer base is a testament to the cable industry’s failure thus far to effectively promote non-video services or to appeal to small, specialized audiences. “The industry doesn’t know how to sell something that isn’t a video service,” he said.
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Company officials and others in the cable industry, however, maintain Ingenius has suffered in part because it arrived in the mid-1980s before the explosive growth in the home computer market, and later because of marketing kinks and consumer unfamiliarity with the cable-computer combination.
Formerly known as X*Press Information Services Ltd., the company was founded in 1985 by a partnership of TCI, McGraw-Hill Inc. and a third firm, and at first relied on TCI systems as its clients. Ingenius’ current owner is Liberty Media Corp., a TCI offshoot based in nearby Englewood, Colo., that TCI has proposed to reacquire.
Liberty Media, a publicly held cable systems concern, does not report separate results for Ingenius. But after long losing money, Bennington, without offering details, said the information service today is self-supporting.
For the $150 start-up price, users buy from the company a small converter box, computer software and connectors. The data feed arrives over the same cable lines that carry television signals. The data goes through the converter box and a serial cable into PC-compatible or Macintosh computers.
There, only the categories of information selected by the user (down to levels such as Washington news and college football) are on the consumers’ computer where they are available for viewing and printing.
The service also lets the user designate names or keywords so that the software will automatically collect and save all stories with those entries. For stock prices, the system can track and visually graph daily results.
But there are disadvantages that Bennington and others say have contributed to Ingenius’ relative obscurity. Although the information feed is continuous, consumers can only capture it when their computers are left turned on, which some people are reluctant to do.
Also, the service is not interactive, meaning that users can only tap into and save the data that arrives, but not ask the system to provide specific information. And, unlike the much better-known dial-up on-line services, such as Prodigy, Ingenius has no electronic mail or discussion group capabilities.
Marketing also has been a problem. Bennington said cable systems have not pitched the service to their customers. Because it is often included in the basic cable package, companies get no extra revenue from it. Cable operators, on the other hand, say Ingenius has done little to help them market it.
While Ingenius says it has fewer than 100,000 non-school users, one industry estimate put the number at 60,000. The two biggest dial-up services, CompuServe and Prodigy, have about 2 million and 1.3 million subscribers, respectively, says the Information & Interactive Services Report.
Both rival services offer a broader array of information than Ingenius, but less daily news content. CompuServe also charges a $49.95 initial fee, $8.95 per month and some hourly charges for certain information. Prodigy charges $14.95 per month plus some hourly charges.
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Despite its small customer base, Ingenius is available nationally on systems that reach about half of the nation’s 55 million households that have basic cable. Its presence in Southern California is sparser, however, and the service is not available in the city of Los Angeles.
Ingenius’ connections include contracts with six of the nation’s 10 largest cable conglomerates, which pay to carry it. One of those is Englewood-based Jones Intercable Inc., (ranked ninth by the Kagan firm), which operates the Antelope Valley and Oxnard-Port Hueneme cable systems.
The local cable systems’ small number of subscribers illustrate Ingenius’ problems. Although Jones Intercable has carried the service since 1989, it remains unknown even among top officials in the area’s two cities, Lancaster and Palmdale, and its three largest school districts until a recent Jones mailer mentioned it.
Likewise, it also came as a surprise to Nikki Davis, assistant superintendent of the Hueneme School District, which has a television and VCR in almost every classroom and is innovative with technology.
But once they heard details of it last week, local officials quickly began showing interest. Carol Seidl, Palmdale’s cable liaison, said she wanted to see a hands-on demonstration. And school officials, who would pay only $120 for the one-time equipment fee, called the service a natural for social studies and current affairs classes.
Despite Ingenius’ weak local showing, Jeff Jones, the general manager of Jones’ Oxnard system, worked for the company in Oregon until last year and recalled widespread school use there. Students used Ingenius-linked computers in school libraries to research their projects, he said.
In addition, the company also offers an executive version for $21.95 per month that adds access to business news wires and a daily 15-minute delayed ticker feed on about 30,000 stocks from the major markets.
Gerbrandt and Bill Johnson, deputy chief of the Federal Communications Commission’s cable services bureau, said the experience with Ingenius could help the cable industry gain a future foothold in interactive and non-video systems.
In the meantime, Ingenius must deal with consumers such as Peggy Keegan, vice president of public affairs for the California Cable Television Assn. Unlike most consumers, she’s known about Ingenius for years and the service is carried on the cable system in Oakland where she lives.
But after Keegan got a home computer two years ago, she opted instead for America Online, the third largest dial-up service with 900,000 customers, that charges a minimum $9.95 per month. Today, Keegan uses America Online constantly, but doesn’t take Ingenius.
