Welcome to the Cyberguild

The Economist, June 11, 1994

Constructing the infrastructure for interactive television is supposed to involve digging up half of America -- and cost a fortune. Yet cheapish two- way video networks that use existing technology are sprouting across the United States. The idea is to create a cyberspace equivalent of the medieval guild, where members of a single industry can collaborate on projects.

The Drums network, which has been set up by Sprint, a telephone firm, and Silicon Graphics, a computer company, is meant to tie the film, television and advertising industries into a continuous digital network. The fibre-optic lines are supplied by Sprint's existing SprintLink network. Drums users need to have a workstation: Silicon Graphics, the industry leader in digital imaging, supplies around 90% of the workstations used in the entertainment business.

Drums members pay $ 2,200 per month. What do they get in return? Instead of mailing or biking tapes to advertising agencies for their approval, a production house can send clips in minutes as digital data. Both parties can change the images as they are being watched. And the network allows users to subcontract work to other Drums users. Since its inception in March, it has attracted 20 clients, mostly television post-production houses, with the number doubling every month. Sprint is now looking to take the same marketing approach to different industries, including hospitals and industrial-design firms.

Meanwhile, Digital Network Television, which began limited operations on June 13th, is built around existing fibre-optic networks. Formed in 1993 in New York city by two television news producers, DNet is a digital clearing- house and archive for news organisations: CBS, NBC and ABC in New York and CNN in Atlanta have all been testing the service since March. DNet allows producers at the buying stations to preview broadcast-quality news footage on a workstation, selecting only what they want to pay for, which is then downloaded from DNet. The current satellite-delivery system costs more and is less flexible. DNet already has access to Reuters archives and daily broadcasts; similar deals with America's National Football League and Britain's Independent Television news are under discussion. DNet should allow independent agents to film and distribute their work -- much in the way "stringers" operate in print journalism. And television networks, such as NBC, can also use DNet to ship footage to their affiliated stations, who in turn will be able to edit the digital data cheaply on computers for local broadcasts.

DNet's founders are now considering whether to join Drums, thus linking DNet to an even larger "cloud" of interconnected computers. That way all the elements of broadcast television, from advertising to news, could be developed, produced, and distributed in a digital form. Sprint's upcoming advertising campaign will be created entirely on the Drums network -- becoming an analog signal only when it is broadcast from the station to homes.

by David S. Bennahum