Sunday, September 18, 2005

SRI Media Futures Program

SRI International is one of the world’s largest independent research organizations. When I was there in the early to mid-1990s, you could walk across the campus and pass groups working on artificial intelligence, economic development programs for post-Soviet states, improvements to the public-education system, an easy-clean oven surface, military communications networks, and cancer drugs. If you’re into inventions and innovations, definitely check out the SRI timeline.

At SRI, if you could find government or corporate entities to fund your research, you could largely do whatever you wanted. In 1991, I and two colleagues, Ed Christie and Paul Di Senso, decided that the world needed a research program about the future of digital media. This was before DVDs, DirecTV, digital cable, Tivo, and the rise of the commercial Internet. The outlines of these technologies were becoming visible on the horizon, so we bet that many companies would want to know what was going to be real when.

We somehow wangled internal seed money to get the program started and thus was born the Media Futures Program. It was a “multiclient” research program—that is, many client companies would each kick-in a yearly fee and then receive back the sum-total of research. In essence, it was a market-research business, albeit with an SRI twist. We combined quantitative survey research about consumer demand, an engineering view of technology feasibility and costs, and business analysis of strategic, competitive, and regulatory factors. Put another way, we did original research on what people wanted, what technology could deliver at what cost, and which companies were likely winners.

I was one of the two research leaders. That meant that I managed half the projects, presented results to clients, and participated in much of the sales effort. I also had the fun of getting hands-on with a lot of different research tasks: evaluating the early HDTV prototypes, creating a Monte Carlo simulation of factors involving video-on-demand uptake, and authoring a lot of documents about audio and video compression (technologies that would enable MP3 players, digital-cable boxes, and many other devices).

[Now that Google has made the Usenet archives searchable back to the 1980s, the technically inclined can see what we were talking about when today’s common digital-video technologies were being hashed out in 1992-1994.]

As the idea of “digital convergence” heated up—thank you, Wired magazine, for casting cable and telco CEOs as rock stars—our little research program got big. Apple, AT&T, Disney, Microsoft, Philips, Sony, and most of the “Baby Bells” were clients, as were dozens of others U.S., European, and Asian players.

Ironically, we got most of our notoriety from making negative assessments. In 1992-1993, interactive TV and video-on-demand were the big ideas, which everyone was pushing hard. Our research indicated that the proponents were living in a fantasy world in terms of their ability to deliver such services at anywhere near economical costs.

We were not trying to be contrarians. In fact, we said that interactive television and video-on-demand would make sense someday, but a set of intermediate products and services would emerge before. The most important of those were DVDs and broadcast digital video, which we called correctly as the big winners of the late 1990s. But because we questioned the near-term commercial viability of interactive television and video-on-demand, that was “news.”

In market research, being known as negative is not usually a ticket to success, but we called things as we saw them. And for those willing to read past the headlines, we highlighted plenty of opportunities in what were then seen as less-sexy areas. Ultimately, however, the final verdict came when the clients, whose visionary CEOs we were undercutting, kept renewing their participation in the program.

We also did consulting projects for specific companies. My favorite was a job we did for Technicolor’s CEO and executive team. We helped them decide to get into the manufacturing and distribution of prerecorded CDs and DVDs. This was well before the first DVD was released, yet they went with our call that DVD was going to be big. It was not a slam dunk given the failure of two previous formats, analog videodisc and VideoCD. However, Technicolor went on to become a dominant player in DVD manufacturing, producing more than a billion DVDs per year.

It was a great time and a great team: the three founders plus honorary founder Michael Gold (abducted from SRI’s engineering labs) and exceptional colleagues Adam Gross, Dave Rader, and Joyce Thom.

In 1994, I and two different SRI researchers had started another program, iVALs, which focused entirely on the Internet as a medium for measuring and understanding what consumers wanted and, ultimately, using that knowledge to personalize media back to them. That meant I did progressively less Media Futures until I and the iVALs colleagues left SRI at the end of 1995 to form Personify.

But I’m pleased to report Media Futures kept going strong, continuing to scan the horizon of new digital-media markets as they emerged. Its current incarnation is Digital Futures, part of the SRI spin-off SRI Consulting Business Intelligence.

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