First to Market with Interactive TV

Bell Atlantic is investing a lot of capital in potato futures -- or, more specifically, couch potatoes of the future.

The Baby Bell announced plans last week to open a multi-million dollar digital production center in Reston, Va., later this year. The facility is billed by Bell as the world's first full-scale, interactive, multimedia television production center, and will be the heart of Bell's ambitious "Stargazer" service for video-on-demand.

"In order to build the information superhighway, Bell Atlantic has to locate and integrate a complex series of new technologies in a single place," said Stu Johnson, Bell Atlantic group president for Large Business and Video Services. "In Reston, we will begin to master the new ways in which people will get their entertainment, information, education and on-line transactions in the world of interactive media."

Bell Atlantic Video Services Co., the Baby Bell's infobahn arm, will begin relocating to the Reston production center in April. By July, 100 BVS employees and nearly 100 subcontractors will be employed at the center, which can support at least 350 people. The Reston facility is designed to support the creation and rollout of Stargazer products and services, and will also function as an R&ampD site for new interactive technologies.

Bell Atlantic describes the center as a digital factory, which will process raw material in the form of film and video tape. The 172,000 square-foot facility will house several distinct units, including a digital production studio, a digital service bureau, an operations center and a demonstration center.

The digital production studio will design and produce interactive multimedia software for Bell Atlantic clients. This group will include entertainment and educational programmers, advertisers and others that want to offer services via Stargazer. The studio will be capable of processing material in all film -- video and digital formats -- and converting it into a variety of digitized formats compatible with all existing international broadcast standards.

An advanced, high-speed local-area network will allow technicians in the studio to work in tandem on a single production. The disparate elements will be combined into finished scenes and wired to the digital services bureau for encoding and conversion into the Motion Pictures Expert Group, or MPEG, format, which allows the material to be transported via cable or telephone lines. The MPEG standard is already found on some multimedia computers.

Video servers in the operations center store the output of the studio and bureau. Stargazer customers will communicate with online transaction computers that will take orders, compute billing and instruct the video servers to pump programming into homes.

A demonstration center will review and test the material prior to shipping it over the phone lines, providing quality control, a venue to show off the new technology to potential clients, and the capability to conduct focus group research.

In order to transform interactive multimedia television from polysyllabic pie-in-the-sky into reality, Bell Atlantic has hired television producers, directors, graphic designers, audio and video engineers to pioneer what may become the programming of the future.

These multimedia TV pioneers will fuse conventional television production methods, interactive multimedia techniques and software to package and present Stargazer programming. Computer software programmers, called "authoring engineers," will create the commands to download interactive programming into the boob tube, on-demand.

"We believe this market will materialize much faster than the conventional wisdom says it will today," Johnson said.

Greg Cline, a telecommunications analyst with Business Research Group, agrees. "Computainment," as BRG has dubbed the interactive, multimedia entertainment, is an idea whose time has come, he said.

"I think it's a smart move," said Cline of Bell's venture. "I think the market for movies at home will materialize almost immediately, the advantages are just so compelling. The question is, do they understand the market enough to price it right, as a substitution for video cassettes? If they do that, and get wide enough coverage, it will be very, very attractive."

Stargazer's initial infobahn traffic will include films, television programs, documentaries and video health-care information. Johnson said Stargazer's will focus first on full-length movies. Bell Atlantic, he added, already has commitments from "every major studio" to supply content.

Besides providing interactive programming to Stargazer customers, Johnson said, the Reston facility is also designed to reap rewards outside Bell Atlantic's universe. In essence, the studio will function as a service station for the infobahn. And anyone who wants to ride will have to pay for a digital retrofit.

"We are not producing, but preparing produced programs for distribution; the digitization, the encryption, the storage, and so on," said Johnson. "The idea is to create a profit center here, and we will do that by distributing content which is developed here to other regions. We are encouraging other video providers to bring products to the Bell Atlantic service area -- we know they don't have the capital to build the products and services we intend to provide."

Bell Atlantic recently wrapped up the first year of its Stargazer pilot program, which delivered video on-demand to 300 of its employees in Northern Virginia. During that time, Bell Atlantic tested the transmission, switching, video file server and digital compression technologies necessary for on-demand delivery of entertainment and information via the telephone line.

This summer, pending regulatory approval, the company will begin test-marketing its Stargazer service, connecting about 1,000 Bell Atlantic customers in Northern Virginia to its video dial-tone network. Bell Atlantic hopes to make Stargazer commercially available in greater Washington D.C by early 1995.

By testing the interactive waters first, Cline said, Bell has a unique opportunity to demonstrate the technical and financial feasibility of interactive, multimedia television.

"Being first to the market will prove or disprove the concept," Cline said. "If they make the right decisions, it will end a lot of the hype we have heard about video- on-demand."