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WebTV brings Internet to wider audience New products linking WWW with TV sets expected next year

JOE SCOFIELD doesn't own a computer, but that hasn't kep him from becoming an Internet addict.

"I'm kind of illiterate as far as computers," said Scofield, a retired government worker living in Mount Pleasant, N.C. But Scofield knows enough to plug a few wires into the back of his television set. And now that's all it takes to get onto the Internet.

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Scofield uses WebTV, an electronic box that turns a standard television set into an Internet terminal. WebTV is the first such product to be mass-marketed to American consumers. It hit stores just in time for the holiday shopping season, and makers ** of the devices say that sales are strong -- although some retailers report lukewarm demand.

But WebTV is just the beginning.

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Next year will bring more products that link the Internet to TV sets. In addition, a number of companies are creating telephones that will receive electronic mail messages and allow users to shop over the graphics-rich World Wide Web portion of the Net. No longer will people need a $2,000 computer to visit cyberspace. The new devices will generally sell for $500 or less.

Creators of the new Internet devices say that the expense and complexity of computers have kept millions of Americans from plugging in. Despite years of technology hype, only about 10 percent of Americans visit the Internet regularly, according to industry estimates. Two-thirds of American households don't have computers, and many of those that do find it too difficult to find their way on line.

Experts doubt WebTV will catch on like the videocassette recorder. But it nonetheless represents a milestone in efforts to make the Internet a mass medium. Only by breaking its dependence on personal computers, the argument goes, does the Net have a shot at becoming as much a part of normal life as the TV and telephone.

In an important development, the Federal Communications Commission approved standards last month for digital television, also known as high-definition TV. Most attention has focused on HDTV's potential to improve the video and sound quality of broadcast programming. But the FCC standards are also expected to set off a race between set makers and computer companies to build devices that marry traditional TV fare with the Internet and other interactive services.

A simple, cheap Internet terminal was the goal of Larry Ellison, chief executive of the computer software maker Oracle Corp.

Ellison last year created a furor by promising to produce a $500 home computer that would link to the Internet. Since then, Oracle has set aside plans to sell such devices to homes, and is instead touting them as a replacement for desktop computers in many businesses. But a number of companies have rushed to fill the vacuum Oracle left behind.

Rather than offer full-fledged computers, these firms want to create devices that add Internet capabilities to appliances that are already familiar to nearly everybody.

Chip Herman, vice president of marketing for WebTV Networks, believes his company's product will bring Internet access to the masses. "First and foremost, it gives you a cost-effective way to access the Internet," said Herman. "The second thing it does is make it easier to access the Internet. Frankly, it's easier than programming your VCR."

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WebTV Networks developed the technology, then licensed it to two major consumer electronics firms, Philips Magnavox and Sony. Each company makes its own version of WebTV, with minor differences between them. WebTV units sell for around $300, and an optional keyboard costs about $100. In addition, customers must pay $20 a month for dial-up telephone access to the Internet, the price PC users typically pay.

But WebTV is far easier to use than a standard computer. There's no need to figure out "IP address" settings or download a "browser." Instead, setting up Web TV is more like installing a stereo. The unit looks like a cable TV box and similarly plugs into a TV or VCR. Telephone and electric cables provide easy connection to a phone jack and wall outlet. Once turned on, the system automatically configures itself. Within minutes, a user can be visiting Web sites or sending electronic mail messages, even if he or she has never touched a computer before.

Scofield bought his WebTV in November. Now he spends hours reading the on-line editions of The New York Times and Washington Post. "I get into it and I can't get off of it," Scofield said. "I've quit looking at some of my favorite TV programs because of it."

That's exactly the kind of reaction that WebTV's Herman is hoping for. But there are plenty of skeptics who believe that WebTV users will soon grow bored with the experience.

"My estimate is that you're going to see WebTV sell a lot of boxes," said Josh Bernoff, senior analyst at Forrester Research in Cambridge. "And then around February, a lot of people are going to say, 'I'm not going to pay $20 for this,' and the boxes will go into closets."

The Internet is a superb research tool, but it contains little that could be called entertaining. Most Web sites feature mostly some photographs and long columns of text. Bernoff says this rather dull material won't appeal to the average television viewer. "I think when they sit down in their living room, they're interested in being entertained."

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Van Baker, who studies consumers for the computer research firm Dataquest, is equally skeptical. Baker recently completed a survey that found that only 4 percent of Americans were interested in viewing the Internet using their television sets. In addition, Baker said that of those who were interested in an Internet TV product, most already owned home computers.

To him, this suggests that few nontechnical consumers are particularly interested in getting on line, and that spells doom for WebTV. "We don't think it will be successful," Baker said. But Jim Bonan, vice president of new business development at Sony Electronics, points to an earlier study, commissioned by WebTV, that found that 52 percent of consumers would be interested in a Internet television device. Though he declined to give specific numbers, Bonan said he was quite happy with sales of Sony WebTV units.

He added that the introduction of low-cost Internet devices could create a major new consumer electronics market segment.

Pub Date: 8/03/97


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