Combing computers with telecommunications is creating a huge global industry and UK companies intend to have their share.
By the middle of next year, shoppers in arcades and supermarkets across the UK will be able to buy insurance policies at the touch of a few buttons on an electronic screen. The screen will be simple to understand and will provide them with all sorts of information such as the financial implications of letting their 17-year-old sons drive a car or increasing their household contents cover. If they still feel uncertain or want to consult a human expert, they can pick up a telephone handset to speak to an insurance expert, whose face will immediately appear in the corner of the screen.
The insurance screens are just one of many potential applications that exploit the graphics, sound and video capabilities of desktop computers in combination with telecommunications links - a pot pourri known as multimedia. Keith Platt, managing director of the eponymously named insurance broker in Wakefield, Yorkshire, which has developed the insurance screens, says: 'We're hoping to have the insurance industry's first multimedia network combining voice and video along with all the usual computer functions.' Platt has eight branches across the UK but the new screens will hugely increase the number of customers his company can handle. He plans to catch the eye of casual passers-by with posters suggesting that they might be paying too much for their insurance. They will then be able to use the screens to check premiums on a wide range of policies, from household contents or motor insurance to life assurance and pensions.
Those who want to buy a policy will be able to complete a transaction by simply inserting a credit or debit card. The policy will immediately be valid and a certificate printed out on the spot. 'The information will be fed directly in to our computers so that they'll be bang up to date,' says Platt. 'Details of policies will also be transmitted directly from the point of sale to the relevant insurance company.' In addition, Platt's staff will use multimedia terminals in their offices to help reduce the paper mountain and speed up the time taken to process claims. They will be able to fill in forms on-screen and draw electronic diagrams of car accidents or household damage. Motor assessors won't even need to visit garages, says Platt. 'The engineer will be able to walk around the damaged vehicle with a camcorder and the image transferred directly to the assessor's desktop screen.' Platt has been planning the multimedia kiosks for several years but it is the power of the latest multimedia PCs and their falling price tag that have convinced him that now is the moment to take the plunge. He aims to use the newly launched PC Videophone from BT, which, as the name suggests, combines a PC and a picture phone.
During the next few months, he plans to raise around £2 million to help pay for the first 200 kiosks. Some of the investment will then be recouped by allowing other organisations to advertise their products on the screens.
Platt is not the only one to believe that the moment is ripe for multimedia. An industry given to hyperbole has exceeded itself in the paroxyms of excitement surrounding multimedia. This is partly because it opens the door to vast new consumer markets. Not only will huge quantities of computer information be available in street kiosks, it is also destined to enter our homes. Using a combination of the PC, phone and TV, people will be able to dial everything from grocery deliveries or holiday bookings to sexual services delivered on lifelike 'virtual reality' screens. BT, the UK's leader in this sector, expects the worldwide market for multimedia to increase from £380 million in 1992 to £19 billion by 2000. Of that, £13 billion will be for network operation and £7 billion for equipment.
Later this year, BT will set up a pilot video-on-demand system for 2,500 customers. who will be able to dial the movie of their choice and have it delivered to their televisions down the phone lines. But it will still be many months before the results are assessed. Anticipation of colossal opportunities for consumer services has pre-cipitated a flurry of courtships between telecoms operators, cable networks and major film companies, especially in the US. But so far, few have resulted in marriages because regulatory issues have not yet been decided.
It is the business market where the real multimedia action is taking place. For business users, the attraction of multimedia is that it enriches the way in which information is conveyed. As Anne Mitchard, personal operating systems product manager at Microsoft, puts it: 'Multimedia brings to the PC a way to "experience" data rather than just to read it or hear it. You almost live the data - it attacks a large number of your senses simultaneously.' The result is that users can assimilate a huge amount of information without necessarily realising how much they are taking in. This makes it ideal for a wide range of applications from presentations and training to video conferencing and collaborative working between people who may be widely spread geographically.
A multimedia PC with sound, animation and video can be bought for around £3,000. In the words of Graham Mills, business development manager for BT Visual and Broadcast Services: 'It's affordable, accessible, and here now.' The main components are an Intel 486 microprocessor, a small camera, and a device to play computer compact disks known as CD-ROMs. At present, some 300,000 PCs in the UK have CD-ROM drives but the number is expected to double each year for the next three years. Users with more advanced requirements can add extra circuit boards to their machines to mimic the most expensive hi-fi systems, and graphic designers can add millions of colours to their electronic palettes.
Thanks to data compression and transmission techniques, it is also becoming possible to transmit sound, video and graphics rapidly across phone lines. Transmission speeds, until recently a few thousand electronic instructions per second, are now measured in megabits and gigabits - millions and thousands of millions of instructions per second. True, the image of the person you are communicating with in the corner of the screen still tends to look somewhat jerky but the quality is improving all the time. Within the next couple of years desktop video will be as good as television, making it ideal for a wide range of business applications.
Among the major companies fighting for a slice of the action are BT, ICL, IBM, Olivetti, Sony and Fujitsu. Their focus is on the boxes that can perform the multi-media tricks, and the software needed to get them communicating. Many companies are still small and focused on a niche area. One such is MultiteQ, a multimedia consultancy based in Buckinghamshire. MultiteQ was formed by a management buy-out from Thorn EMI, and is now part of the Air Group. It expects to turn over £2.5 million this year. Bill Duff, the company's sales and marketing director, says: 'It's a typical early market where small entrepreneurs are developing products. Later on they'll probably be swallowed up by the major players.' Like many multimedia pioneers, MultiteQ began by applying the technology to training. Computers have long been popular for training due to their endless patience and ability to go at each individual's pace. There are also significant cost benefits - once a course has been paid for, it can be used again and again. Multimedia takes computer-based training a stage further by allowing trainees to interact with events on the screen. It becomes an active exercise, rather than a hypnotically passive one. Trainees can see the consequences of their actions, whether they are learning how to handle difficult customers or techniques in engine repair. Multimedia training is safer as well as more efficient - pilots can crash aircraft, and train drivers derail carriages, without risking lives.
In the past, organisations that wanted to provide interactive computer-based training had to invest in specially equipped learning centres. The main technology used was video disks, which cost around £2,000 per course and the same again for the equipment to run them. CD-ROM drives, and the courses to run on them, cost less than a tenth of that.
Even greater economies of scale can be gained by transmitting multimedia training programs over a network so that they can be shared and accessed by numerous users. 'People can have just-in-time training as and when they need it,' says Duff. This is ideal in areas such as software skills because most people only use a small proportion of the facilities on a package. If they have to sit down and learn everything at once then the chances are that they will have forgotten it by the time they need it.
The combination of video, sound and graphics is also highly effective in presentations. You can begin by spinning your company logo on the screen, for example, then play dramatic music before unveiling a new product. You could use computer animation to demonstrate products in action, ring alarm bells to warn sales staff about difficult questions, and conclude with computer-generated, authentic-sounding applause. A travel company could warm up its audience with pictures of white sandy beaches and swaying palms, while a sports promoter could demonstrate the prowess of a tennis player or long-distance runner for whom sponsorship was being sought. Multimedia software packages such as PowerPoint from Microsoft, and Harvard Graphics from STC, enable users to put together their own presentations. Or you can hire the services of a specialist company such as London-based Planet Presentations, which uses Freelance from Lotus to create snazzy special effects for conferences and product launches. The company recently enlivened a rather dry conference on computer products with a series of multimedia introductions for speakers. It featured an on-screen robot as master of ceremonies, and satellite pictures to show the location of Singapore, where the host company was based. A session on telephone hotline support was introduced with the sound of phones ringing and people making enquiries in many different languages. 'The audience of 400 people was spellbound,' says Mark Broomer, managing director of Planet Presentations. 'Moving images and sound effects are so much more powerful and memorable than conventional slides and still photos.' Video conferencing is another well-established application of multimedia technology. Its popularity began in the mid-'80s when companies sought to reduce their travel overheads and wear and tear on jet-setting senior executives. But at that time, video conferencing studios cost around £100,000 to set up and were the preserve of large corporations. Now, multimedia terminals are putting the technology within reach of the smallest organisations.
Video conferencing does not replace all meetings, for example it may not be appropriate when you first talk to a new client, or when you are close to finalising a big deal and want to sit across a big table looking into the whites of their eyes. But it is invaluable for helping build up the relationship at the stages in between. As one user points out: 'You can see whether people are smiling, glum, bored, or starting to become restless.' Video meetings tend to be more structured than their real-life counterparts, says BT's Mills. 'People are more succinct and speak to the point.' Further efficiences can be achieved by calling in experts at short notice to listen to the discussion for a few minutes and provide advice. Fewer matters need be held over until the next meeting.
For Tom Doyle, director of GPT video systems, one of the most useful in-house applications for video conferencing is recruitment. GPT is both a supplier and an extensive user of video. 'You don't get a good feel from the CV, but if the agency can provide half-a-dozen people on video conference, you can short circuit the process by having just a five-or ten-minute chat with each candidate,' says Doyle. 'It helps you with the filter process, so you don't wheel out lots of unsatisfactory people.' He also uses video conferencing for employee assessments.
User inhibition is not a problem. Within about 15 minutes, most people become totally relaxed. The majority of systems have a self-view facility, or 'confidence' monitor, which displays the picture that the camera sees, so they can check that their tie is straight and their hair is in the right place.
But the ultimate form of multimedia in business is collaborative working - the ability to talk to colleagues, to work together on plans while viewing each other in the corner of the screen. Several people can take part in these electronic meetings because the system automatically displays the image of whoever is speaking. Potential users include architects, graphic designers, advertising agencies, engineering firms, builders, lawyers and the medical profession. Pilot systems currently being demonstrated allow surgeons to discuss x-rays and talk trainees through operations from the other side of the world. The screen shows every detail of the operation as it is performed, along with details of the patient's medical history. Architects can discuss draught designs with clients, pointing to details as they are mentioned, and incorporating photographs, video and even three-dimensional tours of buildings as they will feel to walk through. Lawyers can cross-examine witnesses to see if they are worth calling to give evidence, and engineers can check repair routines while they work.
Unilever, the Anglo-Dutch conglomerate, is about to begin collaborative working trials using BT's PC Videophone. Brian West, the company's telecoms services manager, believes that it could offer significant savings and productivity gains worldwide by enabling people to collaborate over a distance. He hopes to test the system in the UK, Italy and the Netherlands, depending on whether it will work with existing technology. The problem is that industry-wide standards have not yet been agreed to enable multimedia systems from different manufacturers to talk to each other. Would-be buyers are wary of getting hamstrung with incompatible systems. 'The lack of industry standards is the main problem,' says West, who is carrying out the trial. 'We are not interested in proprietary systems because we don't want to be locked into one supplier even if it seems to offer better functionality.' Despite the welter of excitement surrounding multimedia, the technology is still in its infancy and many applications are as yet unproven, especially in the consumer market. Sainsbury's, for example, is sceptical that customers want teleshopping. It takes the view that visiting the supermarket is a social experience for many people, and that most customers want to see their tomatoes in the flesh before forking out for them.
Another problem of consumer resistance was encountered by Mike Crompton, a partner with UK multimedia specialist MS Consultants, which is looking at applications in estate agency. The company has written a system to provide a nationwide database of homes for sale, including digitised photographs and video clips showing interiors. The aim is to pipe the images into people's homes via the new video channels.
'You would be able to look at a house in Aberdeen even if you were in Southampton,' says Crompton. He is currently talking to a string of top UK estate agencies and the idea has been well received. One agent even said it might no longer need a high-street presence. But potential vendors are not so happy. 'The problem is not a technological one,' he says. 'The technology is already available. The problem is security - potential vendors were not too keen on the idea of videos of their homes being available to anyone who wanted to look, especially if they might be trying to case the joint.' Such misgivings are causing some people in the industry to question the huge growth forecasts. Multimedia is bound to be held back by the lack of applications programs, says Ian Younger Ryan, distribution manager of Southampton-based Electrovision, which makes training packages. He is steering clear of multimedia software until more potential customers have the necessary equipment to run it. But it's the classic chicken and egg situation, he admits: 'People won't want to buy multi-media terminals until more software is available.' Fortunately for GB plc, many other small UK software houses are taking the opposite view, and are forging ahead to develop the software applications that will encourage business users to take the plunge. At the other end of the market, BT's ambition is to win the battle against industry leaders such as Picturetel and CLI in the US, to become the world's biggest multimedia company. It spent £20 million developing the PC Videophone.
But BT's Mills points out that the real opportunity is in partnerships, joint ventures and other business alliances. BT has licensed its PC Videophone technology to a host of computer companies such as IBM, ICL and Olivetti. It is also working with Motorola, the US semiconductor giant, on reducing the entire circuit board in the PC Videophone down to fewer than half-a-dozen silicon chips. As Mills puts it: 'No one company has all the necessary people, skills, resources, market understanding and access to be successful in this field, alone.' Multimedia may be the ultimate in communication between individuals, but it also heralds a new era in business co-operation. Providing that UK companies share expertise, there is no reason why they shouldn't win a substantial share of this lucrative new world market.