the fragility of forecasting tis easy to see, hard to foresee - poor richards almanack supplementary...
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The Fragility of Forecasting
Tis easy to see, hard to foresee- Poor Richard’s Almanack
Supplementary Material for Chapter 2 in When Media Are New
Copyright 2010, John Carey and Martin C.J. Elton
Famous Forecasts & Predictions
Western Union saw no market for the telephone.
Famous Forecasts & Predictions, Cont.
Western Union saw no market for the telephone.
The New York Times in 1939 predicted that TV would never compete with radio since TV required families to watch a screen.
Western Union predicted no market for the telephone.
The New York Times in 1939 predicted that TV would never compete with radio since TV required families to watch a screen.
RCA in 1966 forecast that there would be 220,000 computers in the world by the year 2000.
Famous Forecasts & Predictions, Cont.
A leading US consulting company in a 1980’s study for AT&T forecast 900,000 cell phones in use worldwide by the year 2000.
Famous Forecasts & Predictions, Cont.
A leading US consulting company in a 1980’s study for AT&T forecast 900,000 cell phones in use worldwide by the year 2000.
RCA in 1928 forecast that 50% of US households would be watching TV by 1933.
Famous Forecasts & Predictions, Cont.
A leading US consulting company company in a 1980’s study for AT&T forecast 900,000 cell phones in use worldwide by the year 2000.
RCA in 1928 forecast that 50% of US households would be watching TV by 1933.
AT&T forecast 10 million Picturephones in use by US households in 1980.
Famous Forecasts & Predictions, Cont.
Link Resources in 1982 forecast 2 million DBS subscribers by 1985.
Famous Forecasts & Predictions, Cont.
Link Resources in 1982 forecast 2 million DBS subscribers by 1985.
The WSJ in 1998 reported a consensus forecast by media analysts of 30 million satellite phone subscribers by 2006.
Famous Forecasts & Predictions, Cont.
“Fifty years hence, automobile traffic will
have entirely disappeared from the surface
thoroughfares of New York City, and people
will be shot through tubes like merchandise.”
- Harvey Corbett
American Institute of Architects
1925
Famous Forecasts & Predictions, Cont.
ForecastingGroup
Penetration(Millions of Households)
Advertising Age 6.6AT&T
8.0
International ResourceDevelopment
9.8
IFTF 11.0Strategic Inc.
4-12
Southham 20-25
Source: Thomson & Bowie, 1986
Market Projections for Penetration of Videotex in US Households by 1990
Projected Growth Of HDTV
Group Making Projections
Year Projected Penetration (%)
NTIA 1997 1
2002 25
2008 94
EIA 1997 10
2000 25
2003 33
America Electronic Association
2000 1
2003 6
NAB Newsletter, March 1989
Projected Cumulative Penetration of HDTV in U.S. Households
Forecast of VCR & Videodisc Player Sales
0
1,000
2,000
3,000
4,000
1980 1981 1982 1983 1984 1985
Thousands of Units
VCRs Videodisc Players
Source: Argus Research cited in Mahony et al 1980
Time Period*Region Under the Spotlights In the shadows
Early 1970’s for 30+ years
North America mainly; also the UK and elsewhere
Videoconferencing Audio conferencing
Mid 1970’s for 10+years
Western Europe mainly
Videotex (online information)
Teletext
Late 1970’s for 20+ years
United States Interactive television Pay cable channels, Pay-per-view TV and video rentals
End of 1980’s for 15+ years
North America Residential broadband networks (fiber-to-the- home)
DSL and cable modem technologies
Late 1990s for 5+ years
United States and elsewhere
Online subscriptions to electronic magazines and newspapers
Buying printed publications, e.g. books, online with regular postal delivery
Second half of 1990s for 5+ years
Europe mainly WAP (for mobile phones)
SMS
* Starting approximately when the spotlight was turned and covering the period during which the service in the
shadows continued to grow rapidly.
New Services: Under the Spotlights or in the Shadows?
Broadcast Subscription TV Videotex
Divx MDS
8-Track Cartridge Cable Game Channels (1980s)
Quadraphonic Sound Smart Screen Telephones
CD-I 3-D TV (in the 1980s - 1990s)
Videodisc Teletext (in the United States)
Videophone Iridium Satellite Phone System
Fax Newspapers Fiber-to-the-home (1990s)
Car Phonographs Interactive TV (1980s -1990s)
New Media Failures
Delphi Survey in 1994 About Media Penetration in 2005
Forecast Actual (U.S.)
Video CD Player (DVD) 15.1% 70%
CD-I 12.2 0
CD-Rom 20.5 65
Virtual Reality System 5.5 0
VOD 16.8 24
Digital Terrestrial Broadcast
17.3 <2
Fiber to the Home 12.2 <1
Source: Digital Media Forum, Digital Technology Timeline, 1994
Factors Affecting Adoption in the Bass Model
pm
Adoptions due to “External Influence”
Adoptions due to “Internal Influence”
Non-cumulative Adoptions
Source: Mahajav, Muller and Bass
p = “coefficient of innovation” (a constant for the product in question)
m = potential number of ultimate adopters (another constant for the product in question)
Time
Average Annual Growth Rate (Percent)FirstYear
First 2Years
First 5Years
First 10Years
First 20Years
USTelephone 200 200 80 50 28B&W Television 75 370 320 190 58Color Television 260 310 133 88 55Radio 567 356 157 77 37CB Radio 496 309 102 -- --Cable Television 114 115 90 51 35Pay Television 263 279 182 -- --VCRs 144 126 85 60 --CanadaTelephone 90 73 52 34 21B&W Television 67 213 184 98 45
Growth Rates for Selected New Products and Services in the US and Canada
Source: Hough (1980), pp. 55-56