Near-term revenue lies in line extension products. (multimedia services)(includes related article)

Despite the exciting revenue potential new multimedia services represent, over the next 5 to 10 years, existing services will be the source of near-term financial returns. Indeed, the surest way to survive competition in the local loop and reap the benefits of future opportunities will be to pursue existing markets aggressively: local access, wireless and cable TV-type entertainment video.

Line extension products, based on current product lines and proven consumer demand, are the logical early candidates for near-term commercial deployment.

High-bandwidth PC access is a probable winner in this regard, building on the exploding installed base of residential personal computers, small-office/home-office trends and the sudden popularity of the Internet and other electronic information services. Near video on demand is the other significant line extension opportunity, based not on the attractiveness of current pay-per-view offerings, but on the clear demand exemplified by the home video market.

The competitive local loop will be a stressful, possibly fatal battleground for existing and would-be stakeholders. The issue is not the ultimate financial attractiveness of a broad range of interactive multimedia services in business and residential markets, extending beyond entertainment to personal productivity and education. Survival in the new business environment is …