in the Marketspace

by Stevan Alburty

From March 20, 1995 op-ed section of the New York Times

1995 by Stevan Alburty
    All rights reserved.




Our long, linguistic nightmare is over.

Just when most of us had reached the point where we were afraid to pick up the newspaper or turn on the television for fear of running across that ubiquitous sobriquet, "the information superhighway," the Harvard Business Review has given us a lean, spunky new buzzword, "marketspace."

Mutated from "cyberspace," science-fiction author William Gibson's term for the emerging electronic frontier, "marketspace" has a space-saving compactness about it. We all save five valuable syllables we can now spend elsewhere. There's also a cold-blooded conciseness about "marketspace" that finally lets us all talk frankly about issues "the information superhighway" attempted to keep hidden behind the bushes on its shoulder.

The magnates who built our nation's first great infrastructure, the railroads, did not do so out of a sentimental love of transportation. It was cash they adored and their iron highways filled vaults with it. Likewise, today's titans of technology are not motivated by a burning desire to bring us information. After all, most of us have more information than we can possibly absorb; we're drenched with the stuff. It's our cash they want, so let's all stop tap-dancing down this euphemistic "information superhighway" and start talking about where it ultimately takes us: the marketspace.

What, if anything, will people be willing to pay for out there in cold, and so-far silent, vastness of the marketspace? Nobody is quite sure, but that is not stopping anybody from making deals. The phone companies are out there hustling deals with the cable companies and the cable companies are cozying up to the entertainment companies and the entertainment companies are out there having lunch with everybody because they're the only ones with a product anybody has ever demonstrated they actually want. This is the same attraction/revulsion Blanche Dubois had for Stanley and his torn t-shirt.

Not since Margaret Mead scrutinized her savages have so many people been so closely observed as the residents of Orlando, Florida, who are participating in Time-Warner's interactive television trials. That great sucking sound to the south turns out to be researchers in Florida collectively holding their breath every time one of their lab rats reaches for the remote.

While we're all waiting for the results, let's play armchair anthropologist and see if there are any clues out there in society's existing behavior which might give us some idea of what will and will not work in the marketspace.

I see three clues and they're doozies - two spectacular successes and one colossal, cash-draining catastrophe.

Unlike a traditional online service in which content is commercial and controlled, the Internet is a cooperative, worldwide network of systems, entirely self-governed and self-managed, used by over 20 million people who simply love computers. More people use the Internet each day than all of the commercial online systems combined and then some.

The Internet is, biologically speaking, a self-organizing system. Left to their own devices for the last 20 years, the citizens of the Net have spawned an almost anarchistic culture which rebels against control and mercilessly hunts down and exterminates all lifeforms which exhibit tendencies towards crass commercialization. What they have created, quite simply, is a raucous, sprawling, unzoned community.

QVC and the Home Shopping Network generate billions in sales each year and are the closest examples we have of an electronic store. When the marketers at Time-Warner lay down their heads at night, you can bet that these are the types of lucrative aisles they dance down in their dreams. But what is the lesson to be learned from QVC and HSN? Do viewers tune in because they have an overwhelming desire to populate their homes with tacky capo di monte ceramics? No, they come for the same reason their brethren in the propeller-hats come to the Internet: to be a part of a community. They're not just viewers, they're visitors. They hear that nice woman from Georgia on the phone chattin' it up with the perky hostess and they just can't help reach for their credit cards and touch-tones so they can be a part of the fun.

Those are the two shining beacons which light the way into the marketspace. And now for the black hole.

Since its founding in 1984, the Prodigy online system has yet to turn a profit, losing hundreds of millions of dollars. Press release promises positive results this year. They really really mean it this time.

A joint venture of IBM and Sears, Prodigy's original business model was based on making its money off of transactions and advertising. Users would pay a tiny, flat fee for unlimited usage each month and Prodigy would skim their cut from all of the goods and services those eager users would surely buy.

But once the users paid their monthly fee, they did the absolute worst thing they could do: they talked to each other. They sent e-mail back and forth. They posted messages on bulletin boards. They plowed through through information like all good drivers on an information superhighway. And for every hour over about four that they stayed on the system, Prodigy lost money. They shopped, but not in the numbers Prodigy needed. And so Prodigy has been scrambling recently to redesign their business model to charge hourly and ala carte for as much as they can without alienating everybody who came for the monthly buffet.

The most basic of all human desires turns out not to be shopping. It is to be a part of a community. Even Thoreau eventually bid farewell to his pond and rejoined the race.

Joe Chung, Chairman of Art Technology Group, a whiztank in Cambridge, Massachusetts, thinks people of the 21st-century will consider it odd that the primary methodology we all used for meeting anyone in our funny, old day was through direct, personal contact. "Even when you pick up a telephone," says Chung, "you pretty much know who you're going to be talking to on the other end." By contrast, our progeny will consider it commonplace to hang out in cyberspace and meet new friends from around the globe, electronic-face to electronic-face.

We go to malls not just for the convenience. It's to check out that girl over there by the lipsticks. No, the one next to her. The one with the hairdo from hell. Did you get a load of her nails?

The successful marketspace will be one that makes shopping a transaction not just of goods and services, but of experience; it will not forsake community for commerce.

We will not be alone in the marketspace. The highway connects us all.

(c) 1995 by Stevan Alburty