THE EMERGING INTERACTIVE WORLD : New Digital Cable Is Put to the Test : Multimedia: Time Warner hopes ‘full-service network’ will become ultimate diversion in theme park-studded Orlando.


The diversions in this resort city already include Walt Disney World and a dozen other theme parks, but entertainment giant Time Warner Inc. on Wednesday unveiled what it hopes will be the biggest diversion of them all: an elaborate cable television system aimed at luring Americans into an entirely new world of interactive video technology.

In a long-delayed technology and marketing trial, about 4,000 Orlando homes are being wired to what Time Warner calls a “full-service network” designed to enable people to shop from home, watch movies on demand and even play video games with people on the other side of town.

“The debut of the full-service network is a turning point for the communications industry,” said Gerald M. Levin, chairman of Time Warner. “With digital interactivity, consumers are in total control of the programming they bring into their homes.”


The Time Warner project is the most grandiose of the interactive television trials that are getting under way across the country. All the tests are aimed at determining what kind of technology is best for delivering interactive services and what kinds of services consumers are interested in. The stakes are high, with the market expected to be worth as much as $75 billion.

“We are all in the learning business; interactive TV remains a mystery and we want to find out what it is that consumers want,” said Vincent Grosso, vice president of interactive services and development for AT&T.;

By enabling consumers to purchase goods with the click of a TV remote-control button or telephone key pad, communications executives think they can grab a big share of the $55-billion-a-year mail-order market and the $15-billion-a-year video rental market and also be a conduit for other information services such as newspapers and computer on-line databases.

So far, though, the industry has had a great deal of trouble building the right mousetrap. Electronic hardware and software agile enough to handle simultaneous requests for movies, games or shopping by thousands of viewers has proven difficult and expensive to develop. Creating a billing system has been equally tough.

“It’s not clear to us how to do the billing--whether to bill per (transaction) or for time of use,” said Edward W. Birs, president of Interactive Digital Solutions, a Mountain View, Calif., unit of Silicon Graphics, the company that helped Time Warner develop the computer software and hardware for its cable system.

The Time Warner trial is nothing if not gold-plated: Besides a large television set, trial customers have a hand-held remote to manipulate a high-powered customized computer that sits on top of the set. There is also a color printer to print receipts, shopping coupons and other documents, as well as an Atari game controller to play video games.


Company officials Wednesday were mum about how much all of this will cost. But industry insiders say it must be at least several thousand dollars per household just for the equipment that sits in the living room, and the wiring will cost thousands more. That has led to some snickering about the realism of the trial. And the services available now are limited to movies, shopping and games.

Several families that have been using the Orlando system--but who have not been required to pay full price for all the services they select--praised the project, saying they were especially impressed by interactive services such as playing video games against neighbors and being able to start a movie at will, rather than having to wait for a predetermined start time.

“The novelty hasn’t worn off yet. We are still enjoying the system, and we hardly even use our VCR anymore,” said Orlando resident Thomas Gerry. Fewer than two-dozen Orlando homes have been hooked up so far, but many more will be in coming months.

To be successful, Time Warner and its partners will have to convince ordinary, paying cable TV customers like Alvin Cowans that they need a higher-tech cable system. Cowans, president of the McCoy Federal Credit Union in Orlando, said he has read about the Time Warner trial but is so far unimpressed with what it promises in the way of new technology.

“Nobody’s really paid a lot of attention to it that I know,” Cowans said. “There’s so many other activities going on in Orlando like the Orlando Magic (basketball team), Disney World and the beaches, that people aren’t really excited about sitting in front of their TV set all day shopping and watching movies.”