From...

July 22, 1999
Web posted at: 9:22 a.m. EDT (1322 GMT)

by Trisha Gorman

NEW YORK (IDG) -- How can business managers stay alert to ways the Web will change the way they do business?

Whether they're managing a pure Internet play or running a non-virtual business with an online presence, it would help them to have a guide to the disruptions and opportunities around the corner.

Seven "emerging inflection technologies" are the market clues offered by analysts from Jupiter Communications at Plug-In, a music-meets-the-Web conference sponsored by the new media research firm here this week.

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Jupiter analysts define an inflection point as a new force in a marketplace that causes a radical shift for businesses in any given niche. Industry inflections can be technological, competitive, or legislative. They're typically spawned by "catalyst products" that are not necessarily related to the inflection technologies.

For example, a few years ago, VCRs were a catalyst product for the birth of video retailers and the watch-at-home-movie business, even though the machines were introduced for viewers to tape TV shows to be watched at another time.

Security will boost music

MP3 has galvanized the music recording industry, but it is not the catalyst for online digital distribution, says Jupiter analyst David Card at the music industry forum.

"Having a file compression format and MP3 players aren't enough," Card says. "The catalyst for online music distribution will be products that offer security for digital content and standards around which consumer electronics companies and others can build products."

Jupiter forecasts that seven key inflection technologies will influence the Internet consumer economy in the next three years:

• Internet radio
• Portable identity technology
• Digital delivery of multimedia files
• Persistent Internet connections
• Interactive TV
• An improved consumer user interface
• Targeted television advertising

Card, Jupiter's director for consumer content strategies, says such Internet radio plays as Spinner.com and Imagine radio are on the right track. He expects that they will, in turn, encourage other developments. For example, Internet radio creates the opportunity for a national advertising platform. It reaches an untapped audience of people who might listen to radio at work on headsets, Card says, noting that "it's possible to listen to music, or work-related speeches and announcements while working." And the venture creates a synergy between the listening and purchasing experience, because consumers can instantly and seamlessly buy a song while it's playing.

Wanted: Portable Web ID

Portable identity is another area ripe for product development, Jupiter's analysts say. A portable identity would let Web-bound consumers manage their online identity, purchases, and passwords to use across multiple electronic commerce Web sites.

An existing market distortion gives undue advantage to early online commerce sites that collected customer data, such as Amazon with its One-Click technology, Jupiter analysts say. Most customers are loathe to change vendors because of the hassle of having to reenter all their personal information, such as credit card data and addresses repeatedly. Personal identity software that places an icon on the Web browser would let them own their own identities, analysts say.

The catalyst for portable identity technologies will be the software "wallet," analysts say. The players with the best chance of success in this arena will be such trusted sources as banks or other financial institutions. The sources can encourage loyalty by offering "frequent usage" point systems that consumers can use with a variety of vendors.

Another area to watch is digital cable service, Jupiter analysts say. They expect digital cable will be a catalyst for two inflection technologies; the comeback of interactive TV, and development of next-generation Web TV-type program guides. Better guides will force better consumer user interfaces both on TV screens and computers.