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.
Famous Forecasts & Predictions, Cont.
 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
Market Projections for Penetration of
Videotex in US Households by 1990
Forecasting
Group
Penetration
(Millions of Households)
Advertising Age
6.6
AT&T
8.0
International Resource
Development
9.8
IFTF
11.0
Strategic Inc.
4-12
Southham
Source: Thomson & Bowie, 1986
20-25
Projected Growth Of HDTV
Projected Cumulative Penetration of HDTV in U.S. Households
Group Making
Projections
Year
Projected
Penetration (%)
NTIA
1997
1
2002
25
2008
94
1997
10
2000
25
2003
33
2000
1
2003
6
EIA
America Electronic
Association
NAB Newsletter, March 1989
Forecast of VCR & Videodisc Player Sales
Thousands of Units
4,000
VCRs
Videodisc Players
3,000
2,000
1,000
0
1980
1981
Source: Argus Research cited in Mahony et al 1980
1982
1983
1984
1985
New Services: Under the Spotlights or in the Shadows?
Time Period*
Region
Under the Spotlights
In the shadows
Early 1970’s for North America
30+ years
mainly; also the
UK and elsewhere
Mid 1970’s for
Western Europe
10+years
mainly
Late 1970’s for United States
20+ years
Videoconferencing
Audio conferencing
Videotex (online
information)
Interactive television
Teletext
End of 1980’s
for 15+ years
North America
Late 1990s for
5+ years
United States and
elsewhere
Residential broadband
networks (fiber-to-thehome)
Online subscriptions to
electronic magazines
and newspapers
Second half of
1990s for
5+ years
Europe mainly
WAP (for mobile
phones)
Pay cable channels, Payper-view TV and video
rentals
DSL and cable modem
technologies
Buying printed
publications, e.g. books,
online with regular postal
delivery
SMS
* Starting approximately when the spotlight was turned and covering the period during which the
shadows continued to grow rapidly.
service in the
New Media Failures
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)
Delphi Survey in 1994 About Media Penetration in 2005
Forecast
Actual (U.S.)
Video CD Player (DVD)
15.1%
CD-I
12.2
0
CD-Rom
20.5
65
5.5
0
VOD
16.8
24
Digital Terrestrial
Broadcast
17.3
<2
Fiber to the Home
12.2
<1
Virtual Reality System
Source: Digital Media Forum, Digital Technology Timeline, 1994
70%
Factors Affecting Adoption in the Bass Model
Non-cumulative
Adoptions
p = “coefficient of innovation”
(a constant for the product in question)
m = potential number of ultimate adopters
(another constant for the product in question)
Adoptions due to
“Internal Influence”
pm
Adoptions due to
“External Influence”
Time
Source: Mahajav, Muller and Bass
Growth Rates for Selected New Products and
Services in the US and Canada
Average Annual Growth Rate (Percent)
US
Telephone
B&W Television
Color Television
Radio
CB Radio
Cable Television
Pay Television
VCRs
Canada
Telephone
B&W Television
Source: Hough (1980), pp. 55-56
First
Year
First 2
Years
First 5
Years
First 10 First 20
Years
Years
200
75
260
567
496
114
263
144
200
370
310
356
309
115
279
126
80
320
133
157
102
90
182
85
50
190
88
77
-51
-60
28
58
55
37
-35
---
90
67
73
213
52
184
34
98
21
45