2009 Ser Inn Mosti 3 Fire

Manchester Institute of Innovation Research

MOSTI - Service Innovation 2009

Service Innovation - Case Studies 1

- Videotex

Ian Miles

[email protected]



This seminar:

• Success and Failure in Information Technology- based services

• Email and Fax

• The Videotex case study

• Lessons about service/IT innovation, or about innovation in general?

• How to assess prospects for new services?



Many IT Success Stories• BUSINESS: rapid uptake of

microprocessor systems, office automation, etc.

• CONSUMER: home computers, CDs, DVDs, digital mobile phones…

• Finding whole classes of “failure” may seem difficult.

• Additionally, some cases where “success” seems simply to be delayed



Trajectory of Hype

Technology Trigger

Peak

of .Inflated ..Expectations

Trough of Disillusionment

Source: Gartner Group, who placed various Technologies on this

Plateau of Productivity

Slope of Enlightenment

Time

Ho

pes



Fax versus email - a Forecast of Business Communications

Terminals (millions)

0.5

0.4

0.3

0.2

0.1

01978 79 80 81 82 83 84 85 86 87

source: Mackintosh report cited in the Economist 4/8/79

US email text

US email graphics+

Europe email text

Europe email graphics+

US fax

Europe fax



Fax vs email

• Forecast: fax would grow to low level and then decline; substituted by email which would mushroom

• Curious differentiation text and graphics…

• Actual trends: Fax took off dramatically; email grew at much slower rate (though eventually probably was substitution roughly as noted – a decade later)



• Messages initially (and often still) very plain text

• Stored in “mailbox”, read on-screen or printed out

• Computer skills, access to “terminals” & ISPs

required• Data manipulable

• Viruses!

• Handwritten, typed, drawn

• Delivered as hard copy

• Telephone numbers, available skills

• No new subscriber service

• Require data re-entry

Fax versus Email – why?



• Computer to computer exchange of symbols,

more radical change• Accurate, cheap and fast

for business use• Less tangible

• Advanced facilities emerge

• Critical mass issues ->intrafirm use

• Incremental to Phone service

• Pages scanned as dots, slow transmission

• Little organisational change

• Rapid diffusion after equipment costs reduced (Japanese push)

Fax versus Email



Videotex

• “A world of information at your fingertips”

– a case study cf G Thomas & I Miles Telematics in Transition Longmans

The Videotex Revolution

The Viewdata Revolution

Viewdata and the Information Society



What was videotex?• aka Viewdata• Access to computers and databases for the masses

(“telematique grand publique”)• Pioneered by PTOs – UK Sam Fedida at Martlesham

Labs, invented c1972 (ideas in air from late ’60s), UK launch 1979.

• 1970s: no home computers, no broadband – solution in UK, Germany and most places: use telephone, use television sets; add a terminal to connect TV set to phone system.

• 40x24 text characters in display (not pixels); some simple graphics: same standard and same “feel” as teletext (aka Teledata broadcast with TV - 1974 CEPT1 standard – teletext invented c1972 BY BBC labs, arose out of same ferment)

• 1200 download /75 upload baud rates



Prestel

• Set-top box• Small keyboard• Simple menus• Request a page of

information• Aimed at

consumers, offices, businesses

• Assymetric speeds



Prestel

• Monthly subscription; Many

pages free, some charge• Information from major services• Newspapers, publishers, etc• Home banking• Person to person email – slow

coming, famous hacker case in 1984 – but message boards popular

Invention in ’70s; first public demonstration 1975; first field trial 1978 (results??); launch of service 1979; forecast several million subscribers in a few years.



Teletext: a source of competition?

Free; Broadcast services; bundled with TV (remote control taking off) & manufacturers enthused; not interactive but “feels so” in

providing access to screens of remote information.



Main points about Prestel

• Introduced by Post/Telecomms public “authority”• Pilot studies not taken seriously – convinced that

this was wave of future• Expectations of massive take up – millions – but

never much more than 100k adopters in UK• TV industry uncooperative• Consumer adoption low: mainly business use

(esp. travel), some hobbyists (and hobbyist VTX)• Sold to FT, wound down in 1990s.



Many Other Countries introduced Videotex

New service markets for PTOs

Videotex:a new MASS market

Support for consumer electronics/ telecomms/IT industries – and perhaps media and publishing

Move into information

society = better-

informed, more

competitive society – advanced services

(for export?)



Videotex adoption

France

Germany

UK

1999: France c10m; Germany -

- - - and UK c0



Miniteltry it at

http://www.minitelfr.com/Uk/home/index.html



MinitelFrench videotex service Terminal provided free – payment hourly – critical mass – tens of millions of users by ‘90s; many purchases of superior terminals

Much scope in system for private services to be plugged in; messagerie and minitel rose very popular, a cultural phenomenon



Minitel/Teletel

• Nora/Minc report, Plan Telematique• Trials from 1978-81 by PTT discovery of

importance of messaging• New communications legislation, political

accommodation with press• 1982: launch; 1983: electronic directory – 1984:

terminals distributed instead of ‘phone directories• Many service providers appeared (10k + by 1989)• Tax on messageries roses (how effective?)• British and German forecasts highly optimistic –

French (lower) forecasts were exceeded!



Minitel “facts”• In the late 1990s, Minitel connections were stable at 100 million a month plus

150 million online directory inquiries, in spite of growing Internet use.• In 1998, Minitel generated € 832 million ($ 824 million) of revenue, of which €

521 million was channelled by France Télécom to service providers. IM note – I recall WSJ report in ‘90s saying that Minitel had cost $10bn)

• Minitel sales in the late 1990s accounted for almost 15% of sales at France's biggest mail order companies La Redoute and Les Trois Suisses. In 2005, the most popular Minitel application was Teleroute, the online real-time freight exchange, which accounted for nearly 60% of Minitel usage.

• In 2005 there were 351 million calls for 18.5 million hours of connection, generating € 206 million of revenue, of which € 145 million were redistributed to 2000 service providers (these numbers are declining at around 30% per year). There were still 6 million terminals owned by France Télécom, which had been left with their users in order to avoid recycling problems. The main uses were banking and financial services, which benefit from Minitel's security features, and access to professional databases. France Télécom mentions, as an example of usage, that 12 million updates to personal vitale health care cards were made through Minitel.[1]

• Source: Wikipedia Feb 2007 See also: • http://www.nationmaster.com/encyclopedia/Minitel



Minitel in decline• The web was slow to take off in France, but…

• From the Bilan Minitel 2005• http://www.leskiosques.com/V3/solutions/minitel/doc/bilan_minitel_2005.pdf



France – language barrier or Minitel competition?

Data from EURESCOM surveys: see www.eurescom.de



Several US versionsAT&T Sceptre videotex - terminal introduced in Miami, October 1983. Wireless keyboard, with modem attached to an ordinary TV - delivered news, weather, sports, stock reports, banking, shopping, email, etc. The Sceptre initially sold for $900 with a monthly fee of $12; the service plan was changed to $39.95 a month with free rental of the box. Marketed in about a dozen cities.Very low adoption rate.Withdrawn in 1986.

http://www.cedmagic.com/history/sceptre.jpg



Early Competition in the US

• Computer-telephone system-computer networking• E.g COMPUSERVE –

– 1969: Compu-Serv Network: business services (time-sharing, then information access)

– Consumer information service developed despite internal opposition: in 1978 marketed through Radio Shack, as MicroNET. Initially permitted since it used the computers during evening hours, when business use was low. Email 1978 (and to Internet 1989), chatlines 1980. Payment: hourly rate

– Expanded to Japan, UK, Germany; c 400,000 subscribers by late ’80s…

– Competing services included AOL (monthly subscription)– But all faced big problems with advent of World Wide Web on

Internet, and slow to respond. Compuserve acquired by AOL late ’90s.



How to explain different trajectories?

Schnedier et al 1991:

• Terminal design and provision

• Systems architecture & service provision

• Billing systems

• Regulatory constraints & political support



How to explain different trajectories? 1

• Terminal design and provision

Britain

Adapted TV set; later set-top box, PCs –

Producers were private firms

Germany

Adapted TV set; later “multitel”)- Producers were private firms

France

Mintel dedicated terminal, distributed free – produced for France Telecom




• Systems architecture & service provision

Britain

Initially closed system (external computers allowed in 1982; one update system with several central databases; private information providers with a common carrier (changes in 1983 when BT becomes IP)

Germany

one central database, regional sub-bases, in a hierarchical network, with interconnection to private computers (expensive and cumbersome); private information providers; supposedly equitable

France

Transpac (packet-switched data) network; service computers and privately owned databases networked; trigger service of e-phone book; private IPS otherwise with DGT licensing access to Kiosque biling service




• Billing systems

Britain

Subscription fee; phone charges; page-based charges for some services; charge appears on phone bill

Germany

Subscription fee; phone charges; page-based charges for some services; charge appears on phone bill

France

No subscription: charged by time using services; up to 1 euro per minute but most services much cheaper; charge appears on phone bill



How to explain different trajectories? 4, finally

• Regulatory constraints & political support

Britain

Not very politicised (though some campaigning for broadband); no specific regulations

Germany

Highly politicised, restrictive regime

France

Politicised but seen as significant industrial policy and specific regulations liberal

Long debate over PTT break-up and

privatisation

Growth of VANS

market for business



World Wide Web

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

1969

Jun-

74

Aug-8

1

Aug-8

3

Oct-8

5

Nov-8

6

Jul-8

8

Jan-

89

Oct-8

9

Jan-

91

Oct-9

1

Apr-9

2

Oct-9

2

Apr-9

3

Oct-9

3

Jul-9

4

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Date

No

of

Ho

sts

Host Count

Adjusted Host Count

NUA’s "educated guess“ as to how many are online worldwide (May 2002):

World Total - 580.78 mAfrica - 6.31 mAsia/Pacific - 167.86 mEurope -185.83 mMiddle East - 5.12 mCanada/USA - 182.67 mLatin America - 32.99 m Compiled by: Nua Internet Surveys

Number of Web Hosts



Conclusions

• Take-off of Web (and Minitel) indicates that there is strong demand for new IT-based services of these sorts

• The right services, with the right content/communication partners -on the right platforms?

• What other lessons need to be drawn?



End of Presentation

2009 Ser Inn Mosti 3 Fire

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